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Virginia Land Preservation Tax Credits

The Virginia Land Preservation Tax Credit (also known as the Conservation Easement Tax Credit) allows individuals or corporations a tax credit against their Virginia Income tax equal to 40% of the value of land set aside for conservation use. The maximum credit that can be used in a given year is $100,000, but any excess can be carried forward for five years.

The individuals and corporations who initially receive the credits often cannot use them due to a lack of taxable income. They are allowed to sell the credits, which generates cash for them and makes the credits available to you.

To determine the value of the easement given, an independent valuation of the land must be performed. This valuation is subject to audit by the Virginia Department of Taxation and the Internal Revenue Service. An audit can result in a change in the valuation, which in turn could change the amount of credits available for purchase.

How can these credits work for me?

Depending on your particular tax situation, the credits can be acquired by what is known as a “transfer of credits”. In this situation, the credits can be directly transferred to you. In this form, you would pay a percentage of the face value of the credits to acquire them. Pilc & Moseley can work with you to determine the appropriate purchase amount. Once that amount has been calculated, paperwork is sent out for signatures. The purchase of the credits must be made in the year the credits are intended for use.

Who can use these credits?

These credits can be used by individuals and corporations to reduce their Virginia income tax liability. We are happy to help you determine whether these credits are right for your particular situation.