The IRS recently issued Notice 2023-30, which provides safe harbor deed language for extinguishment and boundary line adjustment clauses. The amendment was in response to the Secure Act 2.0 passed by Congress in December 2022.
Who does the IRS Notice impact?
Taxpayers who have placed a Conservation Easement on their property and for which they claimed a federal tax deduction.
What is the impact?
The IRS Notice allows certain donors, who claimed tax deductions for donation of a conservation easement, to amend the conservation easement to include “safe harbor” language in the extinguishment clause and in the boundary line adjustment clause.
What actions are needed?
If you choose to amend your conservation easement to include the “safe harbor” language, it must be completed and recorded in the county land records between April 24 and July 24, 2023. Donors are not required to amend their conservation easements.
Bottom Line: We want to make you aware of the option to amend your agreements to ensure the preservation of your charitable contribution deduction in the event of a subsequent change in the property use.
Please contact a Pinion tax advisor for any questions surrounding the IRS Notice or its applicability.
