Resource Library

The U.S. Treasury published new regulations that have important implications for land trusts working on easement or land donations from pass-through entities, such as a partnership or limited liability company. These regulations are dense, complicated and open to further interpretation, but the basic takeaway is that, in certain circumstances, land trusts may need to report and disclose information to the IRS about these donations if the land trust acts as a “material advisor.” If the land trust fails to do so, it could trigger a $200,000 penalty. This creates a first-of-its-kind potential financial liability for land trusts.