Addressing Enhancement in Conservation Easement Appraisals

摘要

This article attempts to bring some clarity to one of the most commonly misunderstood aspects of conservation easement appraisal practice, the enhancement rules. Enhancement rules apply when encumbering land with a conservation easement may enhance the value of neighboring properties owned by the easement donor or related persons. This article focuses on the mechanics of the enhancement rules applicable to easement appraisals for federal income tax purposes; includes an overview of the applicable Treasury Regulations relevant to valuing enhanced properties; Identifies a step-by-step method for recognizing which properties are affected by easement; and discusses various methods of analyzing and estimating enhancement.