How are CE valued?

How are CE’s valued by the appraiser?

The value of the easement must be established by an appraisal conducted by a "qualified

appraiser”. Due to the lack of comparable sales of conservation easements Treasury

Regulations have established as appropriate the "before minus after" valuation method. If the

donation/gift qualifies as capital gains property the "before" value considers the property's

highest and best use while the "after" value estimates and subtracts the value of the property

under the restrictions imposed by the easement. If the donation/gift does not qualify as capital

gains property the "before" value is limited to the property's basis. By virtue of its proximity to

conserved land the value of the deduction must be further reduced by the appraised value of

the “enhancement to value” that may be realized on nearby or adjacent property owned by the

donor or donor's affiliates. The appraiser uses the formula “Before minus After minus

Enhancement” to determine the value of the donation.