6.3. SR 12-20-2010 - Laserfiche WebLink

Home Browse Search

Is an appraisal required to complete a conservation easement with the Minnesota Land Trust? An appraisal is not always necessary. However, a landowner is required to obtain a gual fled appraisal if the landowner is donating a conservation easement valued at more than $5,000 and intends to seek a federal charitable income tax deduction for the gift. A landowner may also need an appraisal to obtain a mortgage subordination, to support a request for a property tax adjustment or to receive payment in exchange for the easement. In other situations, an appraisal may not be necessary. What is considered a "qualified appraisal"? For federal tax purposes and until further guidance is issued, the IRS currently considers a gualifed appraisal to be one that complies with the requirements in Treasury Regulations Section 1.170A-13(c) and is conducted by a qualified appraiser in accordance with generally accepted appraisal standards. What are "generally accepted appraisal standards"? An appraisal will be treated as having been conducted in accordance with generally accepted appraisal standards if the appraisal is consistent with the substance and principles of the Uniform Standards of Professional Appraisal Practice or "USPAP." These standards can be found on the web site of the Appraisal Foundation, www appraisalfoundation ore. Who is a "qua[ified appraiser"7 The IRS defines a qualified appraiser an individua] who has: • Eamed an appraisal designation from a recognized professional appraiser organization or has otherwise met minimum education and experience requirements set forth in regulations prescribed by the Secretary, • Regularly performs appraisals for which the individual receives compensation, and • Meets such other requirements as may be prescribed in federal regulations or other guidance. An appraiser may be considered to have met minimum education and experience requirements if the appraiser is licensed or certified by the State of Minnesota for the type of property being appraised. What should landowners consider in selecting an appraiser? Landowners should ask a number of questions when considering who should conduct this critical part of the conservation easement process, including: • Is the appraiser designated by a recognized appraiser organization and/or licensed by the State of Minnesota? What type of license does the appraiser hold? There are four levels of licensure in Minnesota. With its potential for complicated analysis, a conservation easement appraisal may require an appraiser licensed at the highest level-certified general real oroneriv anpraiser. • Does the appraiser have experience in and regularly perform conservation easement appraisals? Has the appraiser taken classes specifically targeting conservation easement appraisals? Knowledge and experience are not only essential to obtaining a competent appraisal, they are now part of the definition of having that appraisal qualify for chazitable contributions.