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Virginia Land Preservation Credit?

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Question
Virginia Land Preservation Credit?

Answer
This tax credit is for taxpayers that convey land or interest in land located in Virginia to a public or private agency eligible to hold such land or interests therein for conservation or preservation purposes. The conveyance must be in perpetuity.
Credits granted prior to 2007 are 50% and the credits granted for 2007 and beyond are 40% of the fair market value, as substantiated by a "qualified appraisal" prepared by a "qualified appraiser", as those terms are defined under applicable federal law and regulations governing charitable contributions. The credit limit for a taxpayer has been $100,000. However, for taxable years 2009 and 2010 the total amount of credit that may be used per taxpayer per taxable year may not exceed $50,000 or the tax liability, whichever is less. For taxpayers affected by the 2009 and 2010 usage limit, an additional 2 year carryforward will be added to the credit. Any unused credit not affected by the carryforward will remain the same (5 years for donations originating prior to January 1, 2007 and 10 years for donations originating on or after January 1, 2007).

Any taxpayer holding a Land Preservation tax credit that originated on or after January 1, 2002, may transfer unused but otherwise allowable credit for use by another taxpayer on Virginia income tax returns. Transfers and pass-through allocations derived from donations recorded on or after January 1, 2007, are subject to a fee. See Schedule A of Form LPC-1 or Form LPC-2 for further information.
If this credit is taken, for the next three years taxpayers cannot take a subtraction for the gain on the sale of land or easements dedicated to open-space use. A subtraction is allowed for any gain or income recognized by a taxpayer on the application of a Land Preservation tax credit against a Virginia income tax liability to the extent the gain is included in and not otherwise subtracted from federal adjusted gross income.
The transfer of the credit and its application against a tax liability shall not create gain or loss for the transferor or the transferee. Before claiming the credit, complete and file Form LPC-1 and/or Form LPC-2 with the Department of Taxation at least 90 days before filing an annual return. Additionally, applicants filing for tax credits of $1 million or more must apply to the Department of Conservation and Recreation to receive verification of the conservation value. The Department of Taxation will issue a letter acknowledging the amount of the credit. For assistance contact the Virginia Dept. of Taxation, Tax Credit Unit, P. O. Box 715, Richmond, VA 23218-0715, or call 804-786-2992.

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Views: 294 Created on: Jun 15, 2013
Date updated: Nov 24, 2014

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