Limits on Tax Deductions for Conservation Easement Donations
New rules restrict tax deductions for conservation easement donations, especially for businesses and partnerships. This aims to prevent abuses in the tax deduction system. These changes may affect how some entities donate land for conservation purposes.
Key points
Tax Deduction Limits: Businesses and partnerships cannot deduct conservation donations if the amount exceeds 2.5 times the partners' basis.
Exceptions: These limits do not apply to donations made at least 3 years after acquiring the property or partnership interest, or to donations from family partnerships.
Penalties for Errors: Stricter penalties are introduced for incorrect deductions related to these donations, with no reasonable cause exception.
Retroactive Application: The new rules apply to donations made after December 23, 2016, with an exception for certified historic structures, which apply from 2018.
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