An income tax credit is available for tax years beginning on or after January 1, 2000, for the donation of a perpetual conservation easement in gross on real property located in Colorado. The credit is equal to the fair market value of the easement.
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 individual
- C Corporations
- Members of pass-through entities who receive the credit from such entity, regardless of whether such members are Colorado residents.
Annual Limits on Total Credit
General Rule: In general, the credit a taxpayer can claim is limited to the net tax liability reported during the tax year. Excess credits may be carried forward for a maximum of twenty years from the year the credit is originally claimed. The credit may not be carried back to a prior tax year.
Surplus Rule: The general rule is expanded to allow taxpayers, but not transferees of such credits, to claim a partial refund of the credit if State revenues are in excess of certain thresholds. Taxpayers are limited in the amount of the credit they can claim in any given tax year if they claim an income tax refund created by this credit. For tax years beginning on or after January 1, 2000, but before January 1, 2003, this limit is $20,000 per donation per tax year. This limit increases to $50,000 for donations made in tax years beginning on or after January 1, 2003.
For more information, refer to https://www.colorado.gov/pacific/sites/default/files/Income39.pdf