The tax deductions in question involve what are known as “conservation easements,” agreements by which a landowner pledges to forgo development. The land remains in its natural state and, among other things, can provide habitat for animals, including migratory birds.
In typical easements, the landowner continues to own the land itself, but donates the right to develop it to a nonprofit organization that promises not to build on it. The difference between its pre-donation and post-donation value can be deducted on the landowner’s tax returns as a gift, said Steven Barshov, a land-use and environmental-law attorney at the firm Sive, Paget & Riesel, P.C. The exact loss in land value is determined by an appraiser.
For large or expensive parcels, the tax break can eliminate up to half of the taxpayer’s adjusted gross income (or all of it, if they are a farmer or a rancher). And if the amount of the gift is greater than one year’s adjusted gross income, the balance can be carried over through up to 15 future tax years.
Bloomberg reported that in 2010 almost 3,000 taxpayers used conservation easements to deduct $766 million from their tax returns, according to IRS data. As recently as 2007, that amount was as high as $2.2 billion.
Those deductions have been criticized for disproportionately benefiting the ultra-rich. For a time, the administration of President Barack Obama tried to get rid of the tax break.
“They’re overwhelmingly for high-end individuals and provide little to no benefit to the public,” Dean Zerbe, who examined easement donations as a Republican aide on the Senate Finance Committee, told Bloomberg. “I don’t know if I could design a tax break that’s more targeted toward the millionaire set.”
Forbes noted that when Trump gave the Associated Press a 94-page list of $102 million in charitable donations he had made since 2010, one entry was $63.825 million for “various conservation easements.”
The White House did not respond to a request for information about easements, but according to Forbes, Trump has donated easements for land on the Trump National Golf Club in Los Angeles and the Trump National Golf Club in Bedminster, N.J., and for his personal estate in Westchester County, N.Y., as well as his Mar-a-Lago property in Palm Beach.
Easements for golf courses have been particularly controversial, but they have been upheld in the courts. In a 2009 case, the Kiva Dunes golf course in Alabama won its case to claim the deduction after demonstrating that its land was used by 46 species of birds that migrate across the Gulf of Mexico. “Protection of significant wildlife habitat is a conservation purpose qualifying a conservation easement for a charitable deduction,” David Wooldridge, the Alabama attorney who represented the golf course, told PolitiFact.
There's at least one other provision of the tax code where migratory bird habitat could qualify a landowner for tax deductions: expenses related to endangered species recovery. Qualifying for this deduction requires a nearby endangered species and a conservation plan approved by the U.S. Fish and Wildlife Service.
For the record, neither tax benefit applies only or specifically to birds.
Trump is right. Conservation easements to protect wildlife, including but not limited to migratory birds, can be used as tax deductions. He should know: By all indications, he's saved millions in tax payments by using them. We rate the statement True.
The federal tax code includes “deductions for birds flying across America.”
— President Donald Trump on May 11, 2017 in an interview with ‘The Economist’