# Plain Language Summary: Charitable Conservation Easement Program Integrity Act of 2021

This bill targets a tax loophole that wealthy investors have been using to get huge tax deductions for donating land to conservation. Here's what's happening: Some partnerships and investment groups buy land, then quickly donate conservation easements (which restrict how the land can be used) and claim tax deductions worth far more than what they actually paid for the property. For example, a group might buy land for $10 million, donate an easement on it a few months later, and claim a $25 million tax deduction. The bill aims to stop this by saying that if a partnership donates a conservation easement, the tax deduction can't be worth more than 2.5 times what the partners actually invested in that land.

The bill includes some important exceptions. If a family partnership (where most owners are related by blood or marriage) makes the donation, the new limits don't apply. Also, if a partnership holds the land for at least three years before donating the easement, they can avoid the restriction. This means legitimate conservation efforts by families or long-term landowners won't be affected. However, the bill does make penalties much stricter for people who try to claim inflated deductions anyway—they'll face accuracy-related penalties and won't be able to claim they had a reasonable cause for the mistake.

The changes apply to donations made after December 23, 2016, which means the IRS can go back and challenge deductions that were already claimed. For donations involving historic buildings, the rules don't kick in until 2019. Essentially, this bill is trying to preserve the legitimate tax incentive for conservation while cracking down on schemes where investors use partnerships to artificially inflate the value of their charitable donations.

Charitable Conservation Easement Program Integrity Act of 2021

Thompson, Mike

Charitable Conservation Easement Program Integrity Act of 2021 This bill imposes a limitation on the tax deduction for qualified conservation contributions made by certain partnerships if the amount of the contribution exceeds 2.5% times the sum of each partner's relevant basis in the partnership. This limitation also applies to other pass-thru entities, such as S corporations.