Conservation easements: ‘The laws were meant to help ranchers and farmers keep their land’ — Alice Madden

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Here’s an in-depth look at the origins of the conservation easement monkey business from a few years ago. The Denver Post reporter David Migoya also reports on the current investor lawsuits over the deals. Click through and read the whole article. Here’s an excerpt:

Easements were usually very simple: Donate the land, and earn a tax deduction or credit equal to the drop in land value up to a certain amount. The maximum credit was the same no matter the size of the property.
But [Denver lawyer Rodney Atherton] had a new idea — he testified he was not alone in devising it — to maximize the tax benefits of an easement. He’d do it by slicing the donation into pieces, then sell the parts to investors.

Then, with drawings indicating the subdivided property was destined for a housing development, each owner would donate the land into a conservation easement. The rub: Appraisers would value each lot as if development were a done deal, increasing the tax benefit by millions of dollars.

The idea would be the basis for nearly every easement Atherton created thereafter — even property in the most remote parts of eastern Colorado where housing starts were miles away. It was the root of about $37 million in tax credits diverted from the Colorado treasury, most since disallowed.

More conservation easement coverage here and here.

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