New Form 990 for Tax Year 2008

On December 20, 2007, the IRS unveiled its updated Form 990 with the first major changes made since 1979. The new form will be used for the 2008 tax year starting in April 2009. 

The IRS modified and clarified the recently added questions regarding conservation easements. The Alliance worked closely with the IRS on the new form, and we believe the new form will be far easier to understand and use than the current form, which many land trust practitioners found confusing and difficult to complete.

See the Service’s background and commentary on Schedule D for details of the changes.

See a draft of the core form (PDF, 96KB). Part IV, Line 7 of the core form asks:

Did the organization receive or hold a conservation easement, including easements to preserve open space,
the environment, historic land areas or historic structures? If “Yes,” complete Schedule D, Part II.

See the new Schedule D (PDF, 56KB). It asks a number of questions, including:

• The purpose(s) of conservation easements held by the organization
• Total number of conservation easements
• Total acreage subject to conservation easements
• Number of conservation easements on a certified historic structure
• Number of conservation easements included acquired after 8/17/06
• Number of conservation easements modified, transferred, released, or terminated by the organization during the taxable year
• Number of states in which the organization held a conservation easement
• Whether the organization has a written policy regarding the periodic monitoring, inspection, and enforcement of the conservation easements it holds
• Number of staff or volunteer hours devoted to monitoring or enforcing easements during the year
• Amount of expenses incurred in monitoring and enforcing easements during the year
• Whether each easement acquired after 8/17/06 satisfies the requirements of 170(h)(4)(B)(i) and (ii) (these are the special rules with respect to easements on buildings in registered historic districts)
• How the organization reports conservation easements in its revenue and expense statements, and balance sheet

The new schedule D:

• Eliminates questions regarding golf course and residential developments;
• Clarifies reporting is limited to conservation easements (not all easements, such as utility easements);
• Clarifies reporting of acreage under easement at end of year is limited to easements eligible for a section 170 deduction;
• Adds a requirement that the financial statement footnote regarding conservation easements be reported here; and
• Clarifies that hours expended by the organization to monitor or enforce easements includes both staff and volunteer hours.

More information:

• Press release from the IRS
• Overview of Form 990 Redesign For Tax Year 2008 (PDF, 43KB)
• Background Paper (PDF, 81KB)
• Schedule D, Supplemental Financial Statements – Highlights (PDF, 43KB)

posted 1/15/08