Virginia Land Preservation Credit
The Virginia Land Preservation Credit is a tax incentive designed for taxpayers who donate land or an interest in land located in Virginia to eligible public or private conservation agencies. The donation must be made in perpetuity and for conservation or preservation purposes as defined by Virginia Code ยง 58.1-512(A).
Eligibility Criteria
- The donated land or conservation easement must be located in Virginia.
- The donation must be unconditional and in perpetuity.
- The recipient must be an eligible public or private conservation agency.
- The land must serve one or more conservation purposes, such as forest preservation, water quality protection, historic preservation, or outdoor recreation.
Conservation Purposes
Taxpayers must identify the specific conservation purposes protected by the donation by checking applicable boxes on Form LPC-1, Section IV, and specifying the acreage for each use. The conservation purposes must meet the Virginia Land Conservation Foundation Conservation Value Review Criteria.
Required Documentation
- For donations of less-than-fee interest, a copy of the recorded deed of conservation easement and the baseline documentation report must be included.
- For tax credits of $1 million or more, additional documentation is required, including Form LPC-1 Schedule B or Schedule C depending on the type of interest donated.
- Supporting documentation may include certification from the State Forester for urban forest preservation or verification from the Virginia Department of Historic Resources for historic preservation claims.
Application Process
Taxpayers apply for the Land Preservation Credit using Form LPC-1. The form is submitted to the Virginia Department of Taxation. For credits of $1 million or more, additional schedules (B or C) are required based on whether the donation is a less-than-fee interest or fee simple interest.
Transfer of Credits
Land Preservation Tax Credits can be transferred. Taxpayers must use Form LPC-2 to notify the Department of any sale or transfer of the credit.
Tax Treatment
When a taxpayer applies a Land Preservation Tax Credit against their tax liability, it does not create gain or loss for either the transferor or transferee. However, if federal gain or income is recognized on the application of the credit, it must be subtracted on the Virginia return (Form 763, Line 51; Form 760PY, Line 51).
Source:
Form LPC-1 Instructions
Form LPC-1 Schedule B
Form LPC-1 Schedule C
Form LPC-2 Instructions
Form 763 Instructions
Disclaimer: Always verify details with official forms and instructions from the Virginia Department of Taxation and Federal IRS publications. OLT (Online Taxes) provides guidance based on retrieved context but does not guarantee completeness or accuracy for individual cases.