“Two Weeks in the West” noted problems with Colorado’s conservation easement tax credit program. This was just enough information to frighten people, but not enough to help them understand the real nature and extent of the problems with the state tax credit.

It is widely estimated that 20 to 25 percent of all easements started in the state either have flawed “conservation values” or flawed real estate appraisals; some of these easements never get completed, but all too many do, and then become time-wasting headaches for the tax authorities. Many of these flawed tax credits will certainly get denied by the state or the IRS, usually several years after the easement was created, and thus will reduce the actual total claims under the tax credit law, but that’s pretty late in the process. We need to attack the flaws that let the bad easements and bad appraisals happen, and do it long before they get to a tax auditor.

The biggest contributor to those two problems is the vagueness of the underlying legislation and the regulations. The right solution is not to toss the tax credit program, but to close the three large loopholes that cause most of the problems: 1) what the easements say, 2) who holds them, and 3) how they are valued.

The leaders of the conservation community in Colorado are working toward finding cures for these problems. What they need is help to get us there.

Peter E. Sartucci, certified general real estate appraiser
Lafayette, Colorado