Tax Tip of the Month: The Tax Benefits of Land Conservation Easements

If you own a tract of undeveloped land, there is a lesser known option you can take advantage of that has significant tax benefits--a land conservation easement. Basically, a conservation easement protects land for future generations while allowing owners to retain many private property rights and to live on and use their land. If you use the easement to allow a non-profit involved in conservation to protect all or a portion of your land, the difference of the value of the land before and after the easement is in place is considered a charitable contribution and can be deducted from your taxes. In addition, in Virginia you can get a tax credit equal to 40% of the amount of this charitable contribution. In the case of land that would have had quite a bit of value if it was developed commercially, these tax credits can be quite large--so large that a person might not even be able to use all of it in their lifetime. Luckily, you can actually sell tax credits, and the money you make from selling them is considered capital gains income, which is taxed at a much lower rate than other types of income. For more information about conservation easements and assistance with all of the paperwork associated with them, contact our office.

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Picture of the Month This month's picture is of a native brook trout that Ben caught from the headwaters of the Piney River in Nelson County. It was caught with a Royal Wolf lure which is still in its lip.

Latest Firm News

The main focus for Ben this month is on completing up to 40 hrs of continuing education (CPE), which is something all CPAs must do to maintain their certifications. Topics include changes to tax laws and other new issues that will affect people's tax liability. Speaking of which, another big focus for the office this month is preparing packages of materials to send out to businesses who need to apply for loan forgiveness for loans received through the Paycheck Protection Program. Lastly, discussions have begun about what our policy will be for in-office visits during the upcoming tax season. No final decisions have been made yet, and ultimately whatever policy we implement will depend on what happens with the pandemic and what restrictions or recommendations the authorities have in place in the first quarter of 2021. However, one thing is certain--it will be much easier for everyone involved if all our clients have an online portal set up to transfer documents securely. If you have not yet set up your portal, contact our office. As a reminder, our office is open for in-person appointments. Per the current Virginia regulations, face masks are required for clients visiting the office. Phone appointments are of course still available for those who would prefer that option.

Transfer Documents Securely With Our Free Portal System

Did you know we can set up a free online portal for our clients that you can use to send us sensitive documents in a secure manner? It is much more secure than sending documents via email, and much faster than sending printed documents through the mail. Also, you will have access to all tax returns that we have filed for you in PDF form through the portal. This system is completely free to use. All you need to do to get it set up is call our office at 434-392-8311. We have had many positive comments from clients who recently set up their portal for the first time when our office was closed to in-person visits due to the pandemic. One frequent refrain is that people wish they hadn't waited so long to set up the portal because of how much easier it makes everything!

Featured Video: How to check the tax-exempt status of an organization As the holidays season and the end of the year approach, many people consider making a charitable contribution to a 501c3 organization so that they can count it as an itemized deduction on their tax returns. However, not all organizations that you might consider "charitable" fall into this category, and even those that were in that category in the past might not be currently if they haven't kept their paperwork up to date. The video below shows how to check the tax-exempt status of an organization.

Featured Resource: Virginia Outdoors Foundation

The Virginia Outdoors Foundation is Virginia’s leader in land conservation, protecting more than 850,000 acres in 111 counties and cities. VOF was created by the Virginia General Assembly in 1966. Today, they receive both public and private support for their work. VOF protects a wide variety of open spaces, from farms and forests to parks and historic landscapes. They work with federal, state, local, and private conservation organizations to achieve their mission. Click here to visit their website.

Featured Customer: Farmville Rotary Club

Rotary is a global network of 1.2 million neighbors, friends, leaders, and problem-solvers who see a world where people unite and take action to create lasting change – across the globe, in our communities, and in ourselves. The Farmville chapter of this great worldwide organization is involved in supporting many great projects in our community, including Habitat for Humanity house builds and helping with the response to the COVID-19 pandemic. For more information, click here.