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Here at Richards Land Company, we represent many genres of real estate including commercial, residential and, our favorite, recreational properties. Many of the recreational properties that we represent are quite suited for conservation easements, a federal tax incentive for conservation easement donations, the donation being the development rights to the property. This federal program is a wonderful way for the savvy recreational real estate investor to participate in conserving the marvels of nature. On August 3, 2006, Congress approved a phenomenal increase of the federal tax incentive for those donating conservation easements. Previous to this expansion the tax incentive was a deduction of 30% of a donor’s income that had a carry-forward period of 5 years, the period with which the donor could enjoy this tax deduction. This expansion has increased the deduction to 50% and the carry-forward period to 15 years. This expansion is for donations in the year 2006 and 2007 currently, however; there is an effort to make this expansion permament. To learn more about this program visit The Land Trust Alliance website at http://www.lta.org/. Our local land trusts here in the Gallatin Valley are Gallatin Valley Land Trust, http://www.gvlt.org/, and Montana Land Reliance, http://www.mtlandreliance.org/. These are outstanding outfits that are happy to assist with the process. If you think that a conservation easement is a program that suits your needs or desires please feel free to contact us here at Richards Land Company to find out how we may assist you down this generous path. Frederick M. Richards Broker/Owner

What is a 1031? A 1031 tax deffered exchange is the exchanging of property for like property without paying any capital gains. For instance, exchanging an investment property for another investment property, such as a commercial building for another commercial building, or raw land held for investment for other raw land. The exchanged property has to be of equal or greater value than the property being exchanged out of. The following was taken from the IRS website; http://www.irs.gov/. .01 Section 1031(a) provides that no gain or loss is recognized on the exchange of property held for productive use in a trade or business or for investment if the property is exchanged solely for property of like kind that is to be held either for productive use in a trade or business or for investment. .02 Section 1031(a)(3) allows taxpayers to structure deferred like-kind exchanges. Under § 1031(a)(3), property may be treated as like-kind property if it is (A) identified as property to be received in the exchange (replacement property) on or before the day that is 45 days after the date on which the taxpayer transfers the property relinquished in the exchange (relinquished property), and (B) received before the earlier of the date that is 180 days after the date on which the taxpayer transfers the relinquished property, or the due date (determined with regard to extensions) for the transferor’s federal income tax return for the taxable year in which the transfer of the relinquished property occurs. Here at RLC we have been fortunate to have been involved with several of these transactions. This is another powerful tool in managing and growing ones real estate porfolio.

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Richards Land Company
1174 Stoneridge Drive
Bozeman, MT 59718
Ph: 406.556.5614 Toll Free: 866.522.7715 Fax: 406.582.0095