Determining Conservation Purposes Worksheet

Each land trust has its own perception of what types of property will meet the conservation purposes test; however, the IRS does not determine conservation purposes based on our perceptions. It is essential to remember that conservation purposes must be measured against the requirements of the Treasury Regulations. Therefore, the conservation purposes test is not an exercise to describe why you believe the conservation purposes exist on the property. The conservation purposes test is to explain how the conservation easement meets one or more of the conservation purposes set forth in IRC §170(h) and as further described by the Treasury Regulations.

This exercise may be done either in a training or through self-study. Read the examples, and use the worksheet that follows to evaluate whether conservation purposes exist in each example pursuant to the Treasury Regulations. Guidance on using the worksheet with these examples follows.