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Cheese Map


How We Work

Marin Agricultural Land Trust is a private, member-supported non-profit organization created in 1980 by a coalition of ranchers and environmentalists to permanently preserve Marin County farmland for agricultural use.  MALT eliminates the development potential on farmland through the acquisition of conservation easements in voluntary transactions with landowners.  MALT also promotes public awareness and encourages policies which support and enhance agriculture.

What is an Agricultural Conservation Easement?

An agricultural conservation easement is a legal agreement between a landowner and Marin Agricultural Land Trust that prohibits non-agricultural residential or commercial development, subdivision, and uses or practices which would be destructive to the agricultural value of the land. The easement is recorded, and future owners are bound by its terms in perpetuity. The land remains privately owned and on the tax rolls.

Selling an Agricultural Conservation Easement

The sale of a conservation easement to MALT will almost always be treated for Federal and State income tax purposes as the sale of a long-term capital asset.

The gain (or loss) on the sale of a capital asset is the difference between the amount realized on the sale (the sale price received less any costs directly related to the sale) and the seller's cost basis in the easement.1 In the simplest circumstances, basis is equal to the amount paid for the land.2 If the land was inherited, basis is equal to the valuation of the land for death tax purposes in the estate of the person from whom it was inherited.

Net3 long-term gains are taxable, subject to a maximum Federal 15% tax rate, and a maximum California State 9.3% tax rate. Thus, the maximum combined State and Federal taxes on long-term capital gains for California taxpayers is just under 25%.

Tax Deferral

Section 1031 of the Internal Revenue Code provides, in general, that no gain (or loss) is recognized on an exchange of property held for productive use in business (e.g. land used for agriculture) or for investment solely for "like kind property" also held for productive use or for investment. The exchange of different kinds of business or investment property is treated as "like kind property" under Sec. 1031. For example, improved realty or agricultural land exchanged for apartments has been held to qualify as a like kind exchange.

With regard to conservation easements, the IRS has treated a conservation easement and a fee interest in real estate as like kind under Sec. 1031.4 Therefore, a properly structured sale of a conservation easement used to buy other agricultural land, business, or investment property should be treated as a like kind exchange.

Landowners should consult their own advisors about the tax consequences of a potential transaction. MALT will assist in any way it can to resolve tax or legal issues related to the conveyance of a conservation easement, including referral to or consultation with legal experts in the field.


After the agricultural conservation easement is in place, MALT continues to work with farmers and ranchers to ensure that the agricultural and natural resource values of the land are protected through time. Just as importantly, MALT staff work in partnership with easement landowners to enhance those conservation values. For example, MALT has been able to leverage private stewardship funding to raise public funding to help farmers implement costly conservation projects such as fencing sensitive habitat areas or upgrading infrastructure to improve water quality. MALT also provides technical and funding assistance to address future challenges such as climate change adaptation and invasive species control and management.


  1. Under IRS Ruling 77-414, the entire basis of the land (excluding basis appropriately allocated to improvements), up to the amount of the sales proceeds, may be allocated to the easement sale.
  2. For conservation easement basis, the amount paid for the land only, not including the amount paid for any improvements.
  3. Capital losses offset capital gains.
  4. Letter Ruling 8334026