Panel urges limits on tax breaks for land donations

BYRAM-An influential joint congressional committee has released a report that area conservation officials fear would greatly hamper their efforts to protect farmland, wildlife habitat, parks, and open space. The Byram Township Open Space Committee is seeking further clarification on a report by the nonpartisan Joint Committee on Taxation that recommends lawmakers do away with income tax breaks available to homeowners who give charitable organizations easements that restrict changes to personal residences and surrounding land. "It would have a big impact on any town's open space," said Margaret McGarrity, a Byram committee member. "There's a big impetus to deduct open space in any town." The panel of lawmakers said the proposed reforms aimed at ending tax breaks originally designed to preserve historic buildings and the environment would save the U.S. Treasury $1 billion in the next decade. Louis Esposito Jr., a Byram councilman who chairs the Open Space Committee, said most open space in the township is privately owned. He said owners will sometimes donate land to their local municipalities, usually when the property no longer has an active use and can be better served by the community in its natural state. The report called the public benefit of today's easements "tenuous and speculative." It said estimated cash values are often incorrect and resuin unwarranted tax breaks. Donors who live on site, the report went on to state, can sometimes hamper preservation. "The proposal eliminates the need to assess valuation, conservation benefits, and private benefits with respect of transactions that often provide questionable or limited public benefits," the report said. Easements would be eliminated for all buildings and tracts of land that could be used as personal residences. The report said such donors typically do not plan changes to their houses or surrounding land anyway because they were attracted by the historic or scenic nature of the properties. Michele Byers, executive director of the New Jersey Conservation Foundation, said the proposals made by the Joint Committee would limit deductions for a conservation easement donation to 33 percent of the appraised value of land. Esposito Jr. is concerned that the report may include a recommendation to limit deductions for donations of property, including gifts and bargain sales of land, to the taxpayer's basis in the property rather than its market value. "If land was in your family for 100 years, you probably might have swapped horses for it," he said. "Why would anyone donate to a municipality if they can't get the true donation value of the tax deduction? It doesn't make any sense." Byers believes the rational behind the Joint Committee's recommendations is based on cases of deduction abuse for historic façade and preservation easements, and how difficult it is for the Internal Revenue Service to police easement appraisals. The Conservation Foundation has circulated a letter urging the organization's friends and partners to voice their concerns to senators and representatives in Washington, D.C. Esposito said the Open Space Committee will share detailed findings from the report at its next meeting before deciding whether or not to sign onto the letter.