If you Google conservation easements, you get the IRS’s Dirty Dozen list of those that have abused them. Make no mistake, laws are written to allow certain situations to benefit the taxpayer. There’s a difference between doing it right and wrong.
In this episode, Toby Mathis of Anderson Advisors welcomes back Tyler Surat to talk about the right way that conservation easements can benefit investors. Tyler works in the alternative energy sources industry and helps farmers and others with the conservation and preservation of their land by creating easements.
Savvy tax investors or business people and individuals use conservation easements to do two things—help society and the environment, and get a tax benefit as a result. If you are not interested in helping the environment, then it’s probably not something for you to do. The purpose is conservation.
Highlights/Topics:
- What is a conservation easement? The U.S. government quit using funds to purchase land to conserve and expected constituents or the public to do so.
- How did the government incentivize them? Through taxes, which is its greatest asset to offer. It’s a trade. You take a viable development or property that could be developed in some form that has a large market value. It must be developed; hold conservation piece.
- Does it actually hold that conservation effort? The government will offer a tax deduction for the market-developed value of that property.
- What’s the good, bad, and ugly of conservation? Somebody with land or something may use conservation easements to benefit themselves. The investor can be involved, too.
- What if ranchers have land that can be developed? If they do, can they continue to farm and ranch that land? If they can, then they typically take beautiful portions of the ranch or what they own, something that somebody would desire. They have true conservation.
- Is it at the same multiple in private and group investments? Probably not, but their purpose is true conservation. Benefit from it.
- What is given up or away with conservation easements? You’re basically giving up the developed rights. Once you conserve and place that easement on that land, that land’s not worth $2,000 an acre anymore. It’s worth less because a land developer can’t buy it. The only person that would want to buy it – somebody that wants green space.
- Are green spaces in highly developed areas? They can have townhomes.
- What are good investors doing now? Reaching out to local appraisers and getting that local feel. A good provider provides ample documents for investors to be well informed.
- When you become a partner, you’re investing in real estate development. What are the three options? Do nothing, develop, or conserve.
- Do all states follow conservation easements or allow the deductibility? Most states go off adjusted gross or taxable income. They never get to see the conservation portion.
- Do most people know about the statute of limitations for conservation? Three years from the time you exhaust the deduction.
Resources:
Tyler Surat’s Phone Number: 719-580-3051
Internal Revenue Service (IRS) – Dirty Dozen List
Residential Energy Credit: Instructions for Form 5695 (2020)
Tax and Asset Protection Event
Full Episode Transcript:
Toby: Hey, guys. This is Toby Mathis and you’re listening to the Anderson Podcast. I have with me today Tyler Surat. Tyler, welcome.
Tyler: Thank you. Thank you for having me again.
Toby: You’ve mentioned again because we’ve had Tyler on before, probably a few years ago on something that was really important at that time and remains really important, which is the conservation easement.
If you google conservation easements you’re going to see they are on the dirty dozen list with the IRS that have abused it. But make no mistake, the law is written to allow certain situations to benefit the taxpayer, and there’s a difference between doing it right and wrong.
Tyler’s here to teach us how to do it right, to talk about what the whole gamut is of what a conservation easement is, how you can use it, and how savvy tax investors or how savvy business people and individuals use it to do two things—help society and help the environment, and number two, get a tax benefit as a result. If you don’t have that number one, if you are not interested in helping the environment, then it’s probably not something for you. Is that fair?
Tyler: It’s pretty fair. The purpose is conservation.
Toby: That’s it. It’s conservation easement. Could you put it in a nutshell and explain to folks what a conservation easement is?
Tyler: Basically, when the law was written, the U.S. government had quit using their funds to purchase land to conserve and really looked to its constituents or the public to be able to do that. How they incentivized them was obviously through taxes, which is their greatest asset to offer so it’s a trade. You take a viable development or a property that could be developed in some form or fashion that has a large market value. It doesn’t really have to have a large market value, but at the same time, it has to have and check a couple of boxes to be developed and also hold a conservation piece.
Does it really hold that conservation effort? And the government will offer you a tax deduction for the market-developed value of that property.
Toby: I use the ex-President Trump and Mar-a-Lago and use that as an example sometimes where he did a conservation easement on Mar-a-Lago basically since it’s not going to be developed. He got a deduction based on the fair market value of a developed real estate versus giving away those rights in perpetuity to never develop that land. Now, it does benefit that you’re going to have this huge open space for the golf course. But make no mistake about it, there was a reduction in the value of that land as opposed to putting a bunch of houses on it.
He just said, hey, I’ll give that away forever so you don’t have to worry about it. I use this as an example because over here in Vegas, we just had Badlands Golf Course go under, and it ends up being sold in this community, Queens Ridge, which is where a bunch of […] live. They were on the golf course there and now it’s being developed. Their backyard used to be a golf course, and now it’s going to be a bunch of houses. They never did the conservation. If they had, we wouldn’t be in this situation.
I use that as an example, that may be a bad one. But realistically, I just say you’re trying to accomplish a goal of either conserving land or conserving property, and you’re decreasing its fair market value as a result.
Tyler: I think you hit the nail on the head using the example of a golf course. But if you’re looking truly at access to green space, to rivers, mountains, or just anything—even in cities, you take Central Park, for example. I don’t know if it’s under conservation, but at the same time, look how much green space there is in New York.
If somebody were to conserve a piece of property in New York and look at that as what could be developed there, is it better developed or is it better as green space? That’s totally up to the individual, but really that’s what the government’s looking for. The people that want to conserve are looking for those properties and wanting to conserve those green spaces.
Toby: For society it’s better, for the individual they’re losing value so the government’s giving you basically like, hey, we’re going to give you something in exchange. The conservation easement programs are where investors get together and basically take something that would have a lot more fair market value and then reduce its fair market value by giving away mineral rights, air space, et cetera.
Hey, let me stop right there and people probably can tell that you’re not wearing a suit and a tie. Tyler worked with a firm doing nothing but conservation. Tyler’s life is built around conservation. He runs a solar company in Colorado, is that fair?
Tyler: That’s fair to say.
Toby: How many units do you install a month right now?
Tyler: Our company is located in Southern Colorado. We’re probably 60–70 systems a month in the Southern Colorado area. Three hundred and sixty-five days of sunshine. Even when it snows it’s still sunny the next day, so solar does work here very well.
Just like conservation, it’s about green, but it’s about being financially smart too. Solar offers a 26% federal tax credit. It’s not something we really sell to by all means because not everybody could use that, and that’s something you have to speak to your tax professional about. But at the same time, it does offer that and it does work if you want to manage and maintain your life. If you want a consistent cost for 20 some odd years, solar is the way to go.
Toby: The reason I bring this up is because Tyler isn’t going to sell you a conservation easement. Tyler is the guy that I go to and I send our clients to, and our entire tax department sends everybody to Tyler because Tyler knows who’s real and fake.
Let’s go through the underbelly of conservation easement—the fakers. The people who are just trying to do a tax play. They’re super aggressive. If you give a dollar they’re going to give you $15 of deduction, which is absolute BS. But that’s why they got black eyes because you have these con artists—and I always say, when somebody walks up to you in the suit and the tie and they start talking about conservation, you should probably just go hmm.
Tyler: What do you know about conservation?
Toby: Yeah, I think you’re just trying to sell me something at this point. I send them to Tyler and say, Tyler, who’s real out there and what’s a good thing to be involved in? Can you give the good, bad, and ugly into conservation? And more importantly, you worked at a law firm doing the actual conservationist easement, could you give somebody an example of how an individual like a rancher, somebody with land, or something uses the conservation easement to benefit themselves, and then how an investor can be involved to benefit as well?
Tyler: Let’s take that rancher farmer aspect first, and in reality, do they have land that can be developed? If they do, can they continue to farm that land and continue to ranch that land? If they can, and typically what they take is the beautiful portions of the ranch or the beautiful portions of what they own, something that somebody would desire, and they have true conservation. Do they get a tax benefit for it? Sure they do. Is it at the multiple that we’re talking about in private investment and group investment? It’s probably not, but at the same time, their purpose is true conservation. Get a little bit of benefit from it.
Toby: What are they giving away, Tyler? When you say conservation, what are they giving away?
Tyler: You’re just basically giving up the developed rights. Like you said, once you conserve and place that easement on that land, that land’s not worth $2000 an acre anymore, it’s worth pennies on that because a land developer can’t buy that. The only person that really would want to buy that is somebody that would want some green space.
It doesn’t mean you can’t sell it, it doesn’t mean you can’t do anything with it. It can’t exchange hands, it just can’t ever be developed. You can ride your motorcycle on it, you can camp, you can hunt, you can fish, and you can hike. You can do all of these things on this land, but at the same time, the only thing you can’t do is build a building or get what you appraise that land to be. But that’s a little bit different for a farmer because you’re looking at houses or maybe even multifamily kinds of things on those types of land.
Right now, some of the spaces we’re looking at are really green spaces in highly developed areas. They can have townhomes. We’re looking at four phases of housing developments; three of the phases are already developed, and you’re looking at this little piece of 10 acres that accesses the river and the mountains right next to it. So looking at those three phases of houses, that fourth phase has value. But if we don’t develop it, we can create the green space that these other three phases desire. They would like to access the river without going through somebody’s backyard.
Toby: Let’s stop right there. Let’s say I’m a rancher and I know that I could sell my property for let’s just say $1000 dollars an acre (bad probably a number). But if I take away the development rights it’s only worth $100 an acre. If I give that property, I give the development rights and perpetuity to land conservation organizations like Ducks Unlimited or one of those. I say, hey, I’m going to give it away. I would get a deduction of $900 per acre if that was the scenario. I’m not saying that’s the scenario. I’m just saying that that’s an example.
What I get is a tax deduction for the reduction in the fair market value. It’s not just development, but it could be mineral rights, oil, anything that’s underneath that land too. If I’m sitting on a big granite depository and I know that I could sell it to the granite excavation (whatever you call them), companies that are going to dig it up and find it). I know and I can figure out how much is underneath there and I say, you know what, this is a beautiful land. I don’t ever want it to be chopped up. I don’t want it to be mined, and you give that right away to an organization, you’re going to get a benefit for that. Is that a fair statement?
Tyler: Fair assessment, yep. Really, the only thing I probably have to correct you on is it’s not the decrease in the value of the land, it’s actually what that land is the difference of development cost to your cost of development. What’s the total market sales price of that land? If the land was set aside as 160 townhome lots, what are those townhomes going to sell for? That’s the appraisal that the IRS is looking at as your total deduction amount. That could be tens of millions and your developed costs inside of that could be $10 million.
Let’s say you’re going to develop in the $10 million cost development and a $30 million sale, the deduction is going to be $30 million, and your multiple is going to be the difference between the two.
Toby: You’d have to look at the developed value and then you’d add the cost of the developed value for it to be—
Tyler: You are somewhat right on the rancher portion because if the rancher donates his own land, then he decreases in that value because his market value was $1000. Basically, he could sell that land for farmland. But if he places that conservation, then that’s his deduction. The difference of private investment versus what ranchers have—
Toby: That’s fair, and that’s how they’re getting the multiples. That’s how they’re getting these multiples. You have a developer come in and say this is what it would be worth, and this is where you get into the abusers because they’ll come in and say, oh, this would be worth $50 million when it would only cost us $2 million to develop right and they’re plucking numbers out of the air.
How are those guys doing it, by the way? Are they just buying an appraiser or they’re just playing hocus pocus?
Tyler: Since you and I last spoke, I think you and I talked of using reputable people in the business. People that do it right now, they use people outside of the business because like you said, it’s on the dirty dozen list.
There are so many open audits, and the last thing you want to do is tie yourself to somebody that has one bad appraisal. Even though they gave you 10 good ones, the one bad one that the IRS looked at they’re going to look at all the rest of their appraisals. What the good ones are doing now is reaching out to local appraisers and getting that local feel. I would say a good provider also provides you with ample documents as an investor to be well informed.
When you are investing (and I always tell people this when I talk to them), you’re investing in a real estate development. If you’re investing in the partnership aspect, the ranchers’ thing aside, most of your clients are entering into this partnership-type aspect. When you become a partner, you’re actually investing in real estate development. There are three options: do nothing, develop, or conserve. The good ones disclose the cost of all three. They put budgets to all three so that you can make an informed decision.
Obviously, if you’re talking to me or talking to somebody inside of the conservation world, you’re looking for that conservation piece. But to be informed and have ample documents, that’s really important to find a provider that provides you that.
Toby: You may have a developer that’s developing three different projects. Hey, we’re going to go in phases. They say we want to take one of those phases and conserve it. They’re actually able to say, here’s what it’s worth because this is exactly what next door is worth. We’re going to conserve this parcel and then we’re going to move on and do the next. Now we actually have legit numbers.
Let me just throw this at you. The reason people invest in conservation easements is because let’s say a person like me invests a dollar in conservation easement. My expectation is that I may get a deduction that’s worth 4, 4 ½ times that amount, so I might get a $4 deduction. I put $1 in, I get a $4 deduction (let’s see if I can actually use the right numbers). So then it’s just about the math.
If I am in a tax bracket that’s higher than 25%, I might be okay. If I’m 25% or below, it’s awash. Hey, I didn’t really benefit myself, but I did something good for society. Yay, I gave money away. But if somebody’s in the highest tax bracket and it’s going to save them $0.40 on the dollar, then they could pocket it. But if you’re somebody who’s over $500,000 a year, legitimate conservation easements become very attractive. But a legitimate conservation easement, there’s a bright line. We have a 250%, so it’s five times your investment where you become what’s called a listed transaction. You have to disclose it to the IRS.
What they’re really saying is if you’re below five times, chances are you’re safe. The groups that you work with, what type of multiples are you talking about in those groups? Am I in the right ballpark?
Tyler: You’re in the right ballpark. I would say anything from 4–5. You inch closer to that five mark and that really is a little bit higher. I know we’re talking cents, but it does make sense to not get close to that five. I would say closer to the 4 ½, the 4, 7, 5 type multiple. Like you said, the part that makes sense about this is for somebody that’s making $500,000 and they really have no deductions. It makes sense for a W-2 type employee like a high earner. It makes sense for a business owner that you purchase an asset for a dollar for dollar depreciation value, or do you put your money towards an investment that gives you a four to one by the time the tax year ends.
So really, the multiple parts are the important part because that’s keeping that deducted value or the charitable value that you’re deducting from your taxes—that charitable deduction—that means that money is in that 20%–25% bracket. You would have paid 40% tax on that money. It’s still cash out of your pocket at the 20%–25% level, but now it’s deducted from your taxes. The best benefit of this is it takes your $500,000 and reduces your taxable income, so even your tax bracket swings on the amount that you do pay taxes on.
It really does have the tax benefits that people want because you can go out and do this. You can go donate dollar for dollar to your church for that same deduction, or dollar to dollar to a different type of charity. But really, the financial play here is to keep your overall tax and tax monies in that 20%–25% bracket, which is very appropriate. You realize that the huge deduction that you’re taking, but done right, the IRS doesn’t question things that are done right. Like you said before, the law is the law. If the law is done right, the IRS doesn’t question that. Keeping the multiple appropriate is very, very important.
Toby: That’s a big one, they also want to know that you’re doing it for the right reasons. You’re doing it for the conservation. There may be a higher multiple, you may go above five. I would say, if you have to do a risk-reward. If it’s too high a multiple, you better make sure—
Tyler: Never go above five. I say that publicly. You just don’t want to do that.
Toby: You’re going to get audited.
Tyler: I would just say unless there is ample, ample documentation to be able to do that because the amounts we raise for conservation partnerships—let’s just go over that really quick—is what the costs are to develop that property. If you’re looking at 100 lots and it’s going to take $6 million to develop those lots, and we’re going to sell those lots for $25 million—let’s keep it in that 4 ½ type range—then we’re going to raise the $6 million because that’s what it would take to develop those lots.
We’re going to raise that $6 million and then our investors are going to make the choice. There is a vote among the partnership and it’s unanimous usually towards conservation, obviously, is what we’re looking for. And then our deduction is that $25 million that the investors inside of that $6 million are sharing.
Raising appropriate develop costs. Construction costs, obviously, going through the roof right now. Do you go crazy with that raise, or are you cautious with that because you don’t know if that’s going to sustain? Getting that develop cost is just as important as what the property’s worth after development.
Toby: You have to show the IRS that not only can it be developed, but that you have the funds available to do the actual […]. If you do that, the reward is, hey, I’m giving up—because now you’ve raised the money, and yes, you could develop it. You could sell it for $25 million, and you’re giving up all that $19 million of profit. Your reward is you get a deduction.
Tyler: You’re getting a deduction for the same amount. They’re trading dollar for dollar on the deduction portion.
Toby: Think of it like a private placement where the private placement gets all in and they say, hey, just give it all away. If it’s hitting a little different, they just say, hey, do it again because that’s what Tyler said.
Tyler: I’ll tell you a little niche that I found in some of the providers, which has been a good thing and meets IRS criteria of ongoing business for the entity itself. Some of the good providers, they would hold some of the acreages for development. If you have 10 acres of land and you’re withholding 2, typically that land doesn’t get developed by the group. That land will sell, which ultimately ends the assets of the partnership, and that’s how people get out of conservation partnership, it’s not perpetual.
But at the same time, it does show that there’s still a piece of that land that can be developed and developers desire that land because they purchase it, or I’ve seen a group develop. I’ve seen them put townhomes on the front of a conservation easement in five acres and conserve the rest of the backyard to be able to do that. The good ones, they’re actual developers. They know what they’re doing real estate-wise, they’re not just creating a tax tool. That’s something that you do want to avoid is just the creation of the tax tool.
Toby: That’s why I say, usually, the guys that you have to worry about are the ones walking around and they’re obviously not developers.
Tyler: Well, they have more than one thing going on too. Some of my providers right now, like I said, they’re developers. They’re doing other things. They’re using this one development maybe to mitigate their own taxes. Not a whole lot of people can take advantage of a $30 million deduction. I mean, Toby, you might be able to do that.
Toby: I’ll take it.
Tyler: They do carry forward for 15 years too. If you have that, you might as well.
Toby: You just went right to the area I wanted to. What is the deductibility of this? Is it the 50% of adjusted gross income, carry it forward for 15 years.
Tyler: It’s 60 actually. We tell people to plan on the 60%. It’s that range of assets to be able to deduct it.
Toby: Let’s make this real. You’re somebody who’s making $700,000 a year. Let’s say you’re in California, and you’re getting hit 37% federal. It might go up to 39.6% (we’ll see), but you got your state which right now is probably topping at 13%. You’re essentially in the 50% tax bracket. You give $100,000 into a conservation easement. You do the private placement. The tax benefits would be (let’s just say) 4 ½, so you’d get a $450,000 tax deduction, which is going to net you a benefit of around $200,000. Do all the states follow the conservation easements, or do they allow the deductibility?
Tyler: I was actually just texting one of my investors, and he said, what about the state and how does that fall into that? Well, most states, fortunately, go off of your adjusted gross income or your taxable income. They never get to see the conservation portion. Not that we’re hiding anything, it just happens to be that’s part of the federal tax return as you get to your AGI, and then your charitable donations come in, and your taxable income is what your taxable income is.
Unfortunately, most states default to taxable income, and so it does affect your state rate. I’ve heard a state rate as high as 8%. Do you know any higher state rates?
Toby: California, New York.
Tyler: If you’re talking of paying 8%–10% on $700,000, well if you brought your income down and now you’re sitting at the $250,000 level, look how it affects your state taxes as well. Your overall tax benefit, even just down to the state level, can be very significant. That’s where people get scared—significance—because they are averse to risk.
In 2019, only 16,000 people took advantage of this strategy for two reasons. One is an aversion to risk is what I said, and two would be a lack of deals. A lot of people got out of the space just because there are 80+ audits open to conservations right now, but those are the abusers. They were the ones that were taking back transactions.
Toby: And it’s them being audited, not you. You’re not getting audited. Here’s a big one is you have to give away the development rights. You can’t have a reversionary interest. You can’t say, hey, I’m going to give it away for 20 years. You got to get rid of your right. It’s got to be in perpetuity, no strings attached. Otherwise, it’s not a completed gift and they say you didn’t really give it away.
The same thing that you did if you gave your church money and said you got to pay it back to me here.
Tyler: Something cool that most people don’t know about conservations is the statute of limitations. The statute of limitations is three years from the time you exhaust the deduction. If you exhaust it in the first year, then even though the group may be audited in year seven and something may happen to that conservation in year seven, you’re beyond the statute of limitations for that group.
The point is to use a good provider, let’s just get that straight. I’m not worried about audits if we’re using good providers. But at the same time, if you’re exhausting that, your statute of limitations starts right then. If five years down the road the group gets audited and they reduce the amount of the appraisal and do the deduction, that doesn’t affect you because your statute of limitations is up.
Toby: I’ll put Tyler’s information up. What Tyler does for you is he’ll find you a good group. You’re not a promoter or anything like that, are you?
Tyler: No. That’s the other thing with conservations is just how they paid promoters, advisors, and things like that. I know the group, the group and I work closely together on some other development projects. I just happen to have access to multiple groups that offer these to my clients.
Toby, you and I share a similarity. I advise people on a daily basis of mitigation. My clients who pay me, so referring and taking your referrals—you and I share a couple of clients on some advisement-type things and just taking those referrals and pushing them to the good groups. That’s where my clients are already sitting, and passing along that information is a benefit just to me, in general, to know that you’re going to a good group.
Toby: I’ll put your information out. You can always reach out to Tyler. My accountants here, there’s almost 400 of us here at Anderson. My accounting group, they like to bug Tyler.
Tyler: That’s an interesting Zoom call, by the way, when you share that screen.
Toby: They don’t want to see all their faces close.
Tyler: Is that right?
Toby: I always like what’s running around in the background on somebody’s Zoom call.
Tyler: Like a mom […] for my kids.
Toby: I love that. I actually had one with a surfer and his daughter just butt-naked. A two-year-old comes running up and jumps in his lap. I’m like, I think we’re going to have to blur that out. But he ran a really cool operation in California. He teaches veterans. The PTSD, they take him surfing and do a pretty intensive boot camp. It’s actually really cool.
But it was just hilarious because he’s just like this chill big wave surfer whose daughter’s running around. She just strips down and says I’m going to run around naked in the Zoom call. I was like, we’ll blur that part out, don’t worry.
Anyway, Tyler’s this awesome guy. We’ll give you his contact information. You reach out to Tyler. You could say you came from us, but it doesn’t matter.
Tyler: I like to hear that. I like to hear that you’re an Anderson client because that tells me you’re even more informed and are listening to good advice. That does help me understand who you are as a person to be able to know your inclusion in any group comes from good advice.
Toby: We like that. You can mention it.
Tyler: You can continue to say that.
Toby: Take whatever you give. Hey, I’ll take it. But the whole idea is that you’re doing something good and then you’re going to get a reward for it. The code is built like that all over the place. The Internal Revenue code incentivizes good behaviors, incentivizes certain investments, and incentivizes you to give away certain things that have a higher value.
If you benefit as a result, that’s great, that’s perfect. That’s why the laws are written that way. They wouldn’t write them if they didn’t want you to conserve things. Just know where they came from, and you’re dealing with somebody with Tyler, somebody who was on the inside of this because you worked with a law firm where you actually did the conservation easements internally for ranchers, farmers, and stuff like that, right?
Tyler: Yeah, we did. That’s kind of the basis of the background. Like I said, their benefits are a little bit different than it did come from a little bit of a tax perspective. But their benefits are a little bit different than what private investment offers now.
Going forward, seeing that experience, and seeing true conservation, people actually do care about the land. I’ve seen 85 acres in Colorado that access mountains and things if they were to be developed. Like I said, you’re going through somebody’s backyard. How do you get through the townhome development? You can’t block off the beauty of America. The beauty of this is it is allowed. The deductions are allowed, the multiples are allowed, everything’s allowed, and the IRS has cracked down.
Really their advice is—what Toby and I are telling you right now—find a good group because if not, that’s the IRS’s job is to crack down on abusers, and good for them. Good for them for going after something that wasn’t legit because of those bad apples, they ruin it for everybody else because that could be taken away just like anything else. Do you really want conservation to be taken away or have the government just come take your land, or do you want to benefit?
Toby: Please the abusers, you had the promoters that took it to its nth degree. It’s the old thing—pigs get fat, hogs get slaughtered, don’t be at all. The law is written in a particular way, and if you’re following it, there’s a reasonable amount. If you go above the reasonable amount, expect that the group that you’re going to be working with is going to have a look-see because they’re going to say you’re well above what we anticipated. If you’re below that, then you’re not going to have a problem. That’s what we say.
We’re not saying don’t go out there and get a greater tax benefit. What I’m going to say is you don’t want to go into the gray area and into the area where you go—
Tyler: Find what works for you and be informed. That’s the best part is being informed. Look through the documents and make sure everything’s done correctly, and look to people like Toby and your tax advisor to what advice they have towards the group you’re using. They can look at the same documents that you look at.
Toby: Now, I’m going to say this, but if you’re married filing jointly over $500,000, if you’re single, probably over $300,000, you should take a look at conservation easements. But they aren’t around all day long. Conservation easements are project-based and they’re private placements. A good developer might do two or three in a year, maybe one. A good developer might do one. If you start looking now…
Tyler: Maybe two if the need is there, the projects are there. But I’ll tell you some of the groups that I talked to, they’re looking at hundreds of pieces of land and land just does not meet the criteria that the IRS is looking for anymore. They’re becoming few and far between because guess what’s being bought up for development? Conservation pieces and they’re developing them. That’s why you can’t conserve them or find them for conservation because they’re being developed. A piece of land that just came out of nowhere that nobody wants, that’s not good conservation, I’ll tell you that much.
Good developers will create one, possibly two if they have access to that kind of property. But really, the IRS frowns upon more than one.
Toby: Per year, and it may close in June, it may close in July, it may close any time during the year. This is just like any other private placement.
Tyler: Anything about development cost it’s going to close. We had a group reach out to us with significant IPOs where they might take half of a deal. If it’s a strategy you want to get in, we can have that conversation now. You can plan on it, and really, you can take care of your tax burden right now and plan your future cash flows. You don’t have to wait until the end of the year.
Toby: I’ll put your information out there. If you want to just verbally say your web, email, or phone number.
Tyler: My email is tsurat@onetreeadvisors.com. You’re welcome to reach out to me via my cell too. I’ll put that out there, (719) 580-3051. I’d be glad to have a conversation about your questions about conservation and if it works for you. I can tell you if it works for you so that you don’t have to spin your wheels. And then if it does, I can give you a couple of good groups that will help you out along the way.
Toby: Tyler, I really appreciate that, and I appreciate your time today, brother.
Tyler: Thanks, man. Always good talking to you.
