6.1: An Attorney's Checklist
Edited from the checklist in chapter 4 of the 1988 edition of The Conservation Easement Handbook.
In general, to qualify as a tax-deductible gift, an easement must meet three requirements outlined in
Internal Revenue Code (IRC) §170(h)(1):
(A) It must be a qualified real property interest;
(B) It must be given to a qualified organization; and
(C) It must be donated exclusively for conservation purposes.
An easement meets these requirements if it passes the four tests below.
TEST 1: QUALIFIED REAL PROPERTY INTEREST
The easement gift is a qualified real property interest because it is:
A restriction (granted in perpetuity) on the use which may be made of the real property (i.e., a
conservation easement). See IRC §170(h)(2)(C).
Enforceable under state law.
On a property where the owner has the entire interest, other than a qualified mineral interest.
To support this fact you will need:
A copy of the easement deed (cite page/paragraph numbers of "Prohibited Uses and Practices").
A title commitment to ensure that the interest owned by the landowner is sufficient to meet the
standards of Treas. Reg. §1.170A-14(b).
TEST 2: QUALIFIED ORGANIZATION
The gift is given to a qualified organization because:
(Check one item under A; you must also check B and C)
A. The donee is:
A governmental unit. See IRC §170(h)(3)(A) and IRC §170(b)(1)(A)(v).
A charitable organization described in IRC §501(c)(3) that the Internal Revenue Service (IRS)
has determined is publicly supported in accordance with IRC §509(a)(1) or IRC
A charitable organization described in IRC §501(c)(3) that the IRS has determined is publicly
supported in accordance with IRC §509(a)(2). See IRC §170(h)(3)(B).
An organization controlled by one of the three above (a controlled supporting organization) in
accordance with IRC §509(a)(3). See generally IRC §170(h)(3)(B)(ii); Treas. Reg. §1.170A-14
for all of the above.
The donee has the commitment and the resources to enforce the easement's restrictions. See
Treas. Reg. §1.170A-14(c)(1); and
The easement is transferable only to other qualified organizations. See Treas. Reg. §1.170A-
To support your claim to meet these tests you will need:
For governmental units:
o A description of the governmental unit; and
o A copy of the agency's resolution to accept the easement.
For private nonprofit organizations:
o A copy of the charitable organization's letter of determination from the IRS of tax-exempt
o A copy of the organization's resolution to accept the easement; and
o A copy of the organization's articles of incorporation indicating that it is primarily
organized for conservation purposes.
For controlled supporting organizations:
o The organization’s resolution to accept the easement;
o A copy of its IRS tax-exemption determination letter; and
o A copy of the organization’s articles of incorporation indicating that it is primarily
organized for conservation purposes.
For all organization types, in addition to obtaining a certificate of good standing issued by the
secretary of state or similar agency, some indication must be provided of the donee’s overall
stability and commitment to enforce the terms of the easement. This could include:
o An annual report describing its track record of easement stewardship; and/or
o A financial statement indicating availability of funds to defend the easement (although
the regulations state that a separate enforcement fund is not necessary, it certainly helps);
o Board of directors’ policies on easement stewardship and enforcement; and/or
o Availability of a back-up grantee; and/or
o A list of the nonprofit donee's directors and their occupations and organizational
TEST 3: CONSERVATION PURPOSES
The gift is made for conservation purposes because it will: (check all those that apply)
Preserve land areas for outdoor recreation by the general public. See IRC §170(h)(4)(A)(i) and
Treas. Reg. §1.170A-14(d)(2).
Preserve land areas for the education of the general public. See IRC §170(h)(4)(A)(i) and Treas.
Protect a relatively natural habitat of fish, wildlife, or plants, or similar ecosystem. See IRC §
170(h)(4)(A)(ii) and Treas. Reg. § 1.170A-14(d)(3).
Preserve open space (including farmland or forest land) for the scenic enjoyment of the general
public, and which will yield a significant public benefit. See IRC § 170(h)(4)(A)(iii)(I) and Treas.
Reg.. §§ 1.170.A-14(d)(4)(i), (ii), (iv), and(v).
Preserve open space (including farmland or forest land) that is pursuant to a clearly delineated
federal, state, or local governmental conservation policy, and which will yield a significant public
benefit. See IRC §170(h)(4)(A)(iii)(II) and Treas. Reg. §§1.170A-14(d)(4)(i), (iii), (iv), and (v).
Preserve a historically important land area. See IRC § 170(h)(4)(A)(iv) and Treas. Reg. §1.170A-
Preserve a certified historic structure. See IRC §170(h)(4)(A)(iv) and Treas. Reg. §1.170A-
To support these facts you will need detailed evidence, as this is the principal determinant of the
TEST 4: EXCLUSIVELY FOR CONSERVATION PURPOSES
The gift is given exclusively for conservation purposes because: (must be checked)
The conservation purpose is protected in perpetuity. See IRC §170(h)(5)(A)and Treas. Reg.
Surface mining is not permitted (if surface and subsurface rights have been and remain separated)
or the possibility of surface mining is so remote as to be negligible. See IRC § 170(h)(5)(B) and
Treas. Reg. §1.170A-14(g)(4); and
Mortgaged Deed of Trust is subordinated; and
The donor’s reserved rights are not inconsistent with the conservation purposes.
To support these facts you will need:
To make a determination that if substantial rights are reserved (i.e. substantial residential
development is permitted), the conservation values of the property are nevertheless adequately
A copy of the easement deed, citing the page/paragraph numbers that state that:
o The easement is given in perpetuity; and
o If applicable, surface mining is not permitted.
o The reserved rights do not adversely impact the conservation goals.
A copy of the title certificate showing no mortgage and no third-party-reserved mineral rights. If
either of these is shown, then one or both of the following is needed: mortgage subordination
and/or a determination by a qualified expert that the possibility of extraction of reserved minerals
is “so remote as to be negligible.”
Recordation of the easement.
TEST 5: MISCELLANEOUS
The easement includes notice requirements as referred to in Treas. Reg. §1.170A-14(g)(5)(ii),
regarding the donee’s right to inspection and legal remedies; and
Baseline documentation has been assembled per Treas. Reg. §1.170A-14(g)(5)(i); and
The easement includes an extinguishment clause and a formula for proceeds per Treas. Reg.
This material is designed to provide accurate, authoritative information in regard to the subject matter covered. It
is provided with the understanding that the Land Trust Alliance is not engaged in rendering legal, accounting, or
other professional counsel. If legal advice or other expert assistance is required, the services of competent
professionals should be sought.