Earning a Tax Credit

Virginia leads the nation in providing state tax credits for the full or partial donation of land or a conservation easement.

For donations made after January 1, 2007, landowners may claim a state tax credit (Credit) of up to 40% of the fair market value of any land or interest in land donated for the purpose of land conservation or historic preservation. For example, if a conservation easement valued at $1 million were donated to a land trust, the donor would receive a $400,000 Credit.

Landowners may either:

  1. Apply the Credit to state taxes owed. Such Credits may be used in amounts of no more than $100,000 per year and unused Credits can be carried forward for ten additional years, or;
  2. Transfer all or a portion of the allowable Credit to a third party(s) who may apply the Credit to offset their Virginia tax obligation. Note that even though the donors can only use $100,000 of Credits in a single year, they can transfer an unlimited amount of credits to various buyers, and each buyer can then use up to $100,000 of Credits that year.

Many landowners unable to make full use of their Credits in the year of donation will prefer to transfer all or a portion of the Credit. This allows an immediate financial return and avoids the possibility of the credit expiring before all the value can be used.


Transferring a Tax Credit

In July of 2003, Strugar Conservation Services (SCS) facilitated the first Credit transfer in Virginia. Since that time, SCS has facilitated approximately 600 transfers of Virginia Credits valued at more than $25 million.

SCS facilitates transfers between easement donors claiming the Credits (Sellers) and third parties interested in purchasing the Credits (Buyers). SCS matches Sellers with Buyers, negotiates for the highest prices, and provides the process, documentation, and related review and expertise to execute the transfers. In addition, SCS stays in close communication with the State Department of Taxation, Virginia legislators, and the Internal Revenue Service to offer assistance, stay informed, and pass along any new information.

In 2007, SCS's sellers received 76% of the value of the Credit when they transferred in Virginia. In 2008, we expect the price to be even higher. SCS strives to offer the highest rate of return by keeping its overhead low and negotiating for the highest prices from buyers.

If you would like to transfer Credits through SCS, please contact us soon. Please note that sellers may register Credits for sale before their donation is even made.


To Register with Strugar Conservation Services:

  1. Register online,
  2. Download forms and fax or mail completed forms to our office at the address listed below, or
  3. Register by phone toll free at (877) 752-9283

If you have any questions please call or e-mail Mike Strugar at: mike@taxcreditexchange.com