Farmer Faces IRS Audit: Colorado grower’s easement tax break under review; dispute spotlights land valuations

Colorado farmer Marc Arnusch had a straightforward choice: accept millions of dollars from solar companies seeking to lease 2,700 acres of his family’s farmland, or keep the property in agriculture for the next generation. He chose the farm. Now, after spending nearly $1 million documenting a conservation easement, he is facing an IRS audit over the tax deduction associated with it. Reporting by Just the News, recent statements from the Internal Revenue Service and reporting by Colorado Public Radio help illuminate the dispute and the broader debate over conservation easements. Arnusch, a third-generation farmer in Weld County, said the solar offers were tempting but ultimately incompatible with what he wanted for the land.Instead, his family pursued a conservation easement, a legal agreement that permanently limits certain uses of privately owned land in order to protect its conservation values. Federal law allows qualifying conservation easements to generate charitable tax deductions, provided the statutory requirements are met.The decision required extensive documentation. Arnusch’s family hired roughly a dozen specialists, including tax attorneys, engineers, solar experts, mine...