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What information needs to be included in an appraisal? <br />While the specific format, length, and content of appraisals vary, the IRS requires very specific <br />information for charitable gift appraisals. That information is identified on the attached <br />summary. <br />When should the appraisal be completed? <br />For charitable deduction purposes, the appraisal must be completed no earlier than 60 days <br />before the date of the gift (the date on which the conservation easement is signed and accepted <br />by the Minnesota Land Tmst) and no later than the date on which the tax return for that year is <br />due. In some circumstances, an older appraisal can be updated with more current data. For other <br />non-tax purposes, timelines may vary. Conservation easement appraisals are complex and time <br />consuming. As such, landowners should contact an appraiser early in the process as it may take <br />up to 4 to 6 months or more to complete an appraisal. <br />Is it necessary to be concerned about the integrity of the appraisal? <br />YES. The IRS views this issue very seriously and may impose substantial penalties on both the <br />landowner and the appraiser for gifts that are overvalued for tax putposes. Congress recently <br />created new thresholds and penalties for donors and appraisers who artificially inflate the value <br />of an easement for tax purposes. Landowners are well advised to choose an appraiser carefully <br />and to work with the appraiser, a tax advisor and the Land Tmst throughout the process of <br />completing a conservation easement. <br />Remember the simple rule: if it looks too good to be true, it probably is. <br />What are same additional resources for conservation easement appraisals? <br />Please refer to the following references for more detail on conservation easement appraisals: <br />• Treasury Regulations §L170A-13(c) and §1.170A-14(h) <br />• IRS Publication 561 Determining the Value of Donated Property <br />• IRS Notice 2004-41 Charitable Contributions and Conservation Easements <br />• Pension Protection Act of 2006, Section 1219 <br />• IRS Notice 2006-96 Guidance Regarding Appraisal Requirements for Noncash Charitable <br />Contributions <br />• Appraising Easements, Third Edition, published by the Land Trust Alliance in cooperation with <br />the National Trust for Historic Preservation <br />Minnesota Land Trust • 2356 University Avenue West, Suite 240, St. Paul, MN 55114 • 651.647.9590 • www.rnnland.org <br />© May 2008 <br />Printed on recycled paper <br />