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Preservation and Conservation Easements Tax Credit

Individuals or members of a Pass-Through Entity (PTE) may be eligible for a credit for an easement conveyed to the Maryland Environmental Trust, the Maryland Agricultural Land Preservation Foundation, or the Maryland Department of Natural Resources to preserve open space, natural resources, agriculture, forest land, watersheds, significant ecosystems, viewsheds or historic properties if:

  1. The easement is perpetual;
  2. The easement is accepted and approved by the Board of Public Works; and
  3. The fair market value of the property before and after the conveyance of the easement is substantiated by a certified real estate appraiser.

Individuals who are eligible to claim the Credit for Preservation and Conservation Easements and who are not PTE members must claim this credit on Part F of the Form 502CR.  PTE members who are eligible for this credit must claim the credit on Business Income Tax Credit Form 500CR. PTE members who are fiduciaries should see the Form 504CR for instructions on claiming this credit.

The credit is equal to the difference in the fair market values of the property reduced by payments received for the easement.  The credit amount is limited to the lesser of the State tax liability for the taxable year or the maximum allowable credit of $5,000.  The sum of all credits claimed by members of a PTE in a taxable year may not exceed $5,000.

If the allowable credit amount of a PTE member exceeds the maximum of $5,000, up to $5,000 may be carried forward each subsequent year until the allowable credit is used up or 15 years, whichever first occurs.

Complete lines 1-4 of Part X.  For line 1, enter the amount by which the fair market value of the property before the conveyance of the easement exceeds the fair market value after the conveyance as substantiated by a certified real estate appraiser.

For additional information, contact the Maryland Environmental Trust at 410-514-7900,, or the Maryland Agricultural Land Preservation Foundation at 410-841-5860 or the Department of Natural Resources at 410-260-8367.

Note: A copy of the approval and acceptance of the conveyance by the Board of Public Works must be included. Provide a copy of this approval with Maryland Schedules K-1 (510) and/or Maryland Schedules K-1 (504) issued to PTE members.

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