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Land Preservation Tax Credit
This tax credit is for taxpayers that convey land or interest in land located in Virginia to a public or private agency eligible to hold such land or interests therein for conservation or preservation purposes. The conveyance must be in perpetuity. The credit is 50% of the fair market value, as substantiated by a "qualified appraisal" prepared by a "qualified appraiser", as those terms are defined under applicable federal law and regulations governing charitable contributions. The credit claimed by a taxpayer cannot exceed the lesser of income tax due or $100,000 for 2002 and beyond. Any unused credit may be carried forward for the next 5 taxable years. Any taxpayer holding a Land Preservation tax credit that originated on or after January 1, 2002 may transfer unused but otherwise allowable credit for use by another taxpayer on Virginia income tax returns. If this credit is taken, for the next three years taxpayers cannot take a subtraction for the gain on the sale of land or easements dedicated to open-space use. A subtraction is allowed for any gain or income recognized by a taxpayer on the application of a Land Preservation tax credit against a Virginia income tax liability; to the extent the gain is included in and not otherwise subtracted from federal adjusted gross income. The transfer of the credit and its application against a tax liability shall not create gain or loss for the transferor or the transferee. Before claiming the credit, complete and file Form LPC with the Department within 90 days of the credit origination or the transfer of the credit, but at least 60 days before filing an annualreturn. This form is used to notify the Department of a donation of land or interest in land that creates a Land Preservation credit or the transfer of unused credit to another taxpayer. Upon receipt of Form LPC, the Department will issue you an Acknowledgment letter. To avoid delays at the time of return processing, attach the Form LPC Acknowledgment letter to your return. For assistance contact: The Virginia Dept. of Taxation, Tax Credit Unit, P. O. Box 715, Richmond, VA 23218-0715, or call 804-786-2992. To avoid delays at the time of annual return processing, the credit holder should file Form LPC within 60 days of the credit origination or the transfer of the credit, but at least 30 days before filing an annual return. This form is used to notify the Department of a donation of land or interest in land that creates a Land Preservation credit or the transfer of unused credit to another taxpayer. For assistance, call the Departments Tax Credit Administration Unit at 804-786-2992.
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