“Two Weeks in the West” noted problems
with Colorado’s conservation easement tax credit program.
This was just enough information to frighten people, but not enough
to help them understand the real nature and extent of the problems
with the state tax credit.
It is widely estimated that 20
to 25 percent of all easements started in the state either have
flawed “conservation values” or flawed real estate
appraisals; some of these easements never get completed, but all
too many do, and then become time-wasting headaches for the tax
authorities. Many of these flawed tax credits will certainly get
denied by the state or the IRS, usually several years after the
easement was created, and thus will reduce the actual total claims
under the tax credit law, but that’s pretty late in the
process. We need to attack the flaws that let the bad easements and
bad appraisals happen, and do it long before they get to a tax
auditor.
The biggest contributor to those two problems is
the vagueness of the underlying legislation and the regulations.
The right solution is not to toss the tax credit program, but to
close the three large loopholes that cause most of the problems: 1)
what the easements say, 2) who holds them, and 3) how they are
valued.
The leaders of the conservation community in
Colorado are working toward finding cures for these problems. What
they need is help to get us there.
Peter E.
Sartucci, certified general real estate appraiser
Lafayette, Colorado
This article appeared in the print edition of the magazine with the headline Easements are too easy.
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