Conservation easement in gross is a right of the owner of the easement to prohibit certain acts with respect to the property in order to maintain the property in a manner that will preserve its value for recreation, education, habitat, open space, or historical importance. See §38-30.5-102, C.R.S. for a complete definition.
WHO CAN CLAIM THE CREDIT
Taxpayers qualified to claim the gross conservation easement credit (including transferees of these credits) are:
- Colorado resident individuals,
- C corporations,
- members of pass-through entities who receive the credit from such entity, regardless of whether such members are Colorado residents.
A limited liability company with only one member will generally be disregarded for federal tax purposes (IRS Regulation §301.7701-3) as well as state tax purposes. [§39-22-104 (1), C.R.S.] Therefore, a sole member is not a "member of a pass-through entity" and does not qualify as a "taxpayer" for the conservation easement credit unless the member can otherwise satisfy the definition of a "taxpayer" (as a Colorado resident individual, C corporation,
trust, or estate).
For computation of the credit please see Colorado FYI Income 39