December 5, 2005

On November 25, the U.S. Senate passed a tax reconciliation act that did not include the ill-advised draconian reforms that would have affected land conservation organizations and was suggested by the Joint Committee on Taxation in its January 2005 report.

Instead, the Senate bill actually includes expanded tax incentives for donated conservation easements. The bill extends the period during which deductions can be used from six to 16 years. It also raises the ceiling for deductions from 30 percent of the donor’s adjusted gross income (AGI) to 100 percent of AGI for farmers and ranchers and 50 percent for other donors.

The bill also contains a number of other provisions affecting charities in general, including tightened standards for appraisers and appraisals of donated property as well as permitted tax-free withdrawals from IRAs for charitable contributions.

We can all be proud of the role that AFT and its members have played in helping shape this important legislation. But the battle is not over. The House version of this bill does not include expanded tax incentives for conservation—or any of the provisions affecting charities that are found in the Senate bill. Members of the House Ways and Means Committee are expected to join in conference with members of the Senate Finance Committee to shape a final tax bill next month.

AFT is working to ensure that the conservation tax incentives in the Senate bill are included in the final tax bill that comes out of conference, but we can’t do it alone. As the situation develops, we will contact you for help. Stay tuned!

Senate Bill 2020, the Tax Relief Act of 2005 (PDF)