May 15, 2015
Re: Request for Ruling: Land Preservation Tax Credit
Dear *****:
This will reply to your letter in which you request a ruling concerning the utilization or transferability of the Land Preservation Tax Credit (the "Credit") by ***** (the "Taxpayer") when the carry over period expires.
FACTS
The Credit was issued to a donor during the 2006 taxable year. The Taxpayer purchased a part of this Credit during the 2009 taxable year. The Taxpayer and her husband filed joint Virginia income tax returns for the 2009 through 2011 taxable years utilizing the Credit to the extent of their income tax liability. Their claim for the remaining portion of the Credit on their 2012 return was denied by the Department because the carry over of the 2006 Credit expired in 2011. The Taxpayer requests that the Department grant an additional year to claim the Credit.
RULING
Virginia Code § 58.1-512 provides a Credit for 40% of the fair market value of real property or an interest in real property donated to an eligible charitable organization or instrumentality of the Commonwealth for qualifying land conservation purposes. Currently, a taxpayer may carry over the Credit for 10 consecutive taxable years (or longer under certain circumstances) following the taxable year in which the Credit was earned. The carry over period of 10 consecutive taxable years pursuant to Va. Code § 58.1-512 C 1 applies to any conveyance of property or interest in property made on or after January 1, 2007. See Chapters 4 and 5 of the 2006 Acts of Assembly, Special Session I.
For amounts of the Credit earned for the 2006 taxable year, the carry over period was five consecutive taxable years following the taxable year in which the Credit was earned. The five consecutive taxable years following the 2006 taxable year included the 2007 through 2011 taxable years. Accordingly, no Credit earned in 2006 could be claimed on a 2012 income tax return.
Absent statutory authority, the Department cannot extend the time established by law to claim or transfer any unused Credit. Accordingly, the Taxpayer's request to claim any of the Credit at issue on her 2012 Virginia income tax return is denied, and the Department's adjustment to the 2012 taxable year return is correct.
The Code of Virginia sections cited are available on-line at www.tax.virginia.gov in the Laws, Rules & Decisions section of the Department's web site. If you have any questions regarding this ruling, you may contact ***** in the Office of Tax Policy, Appeals and Rulings, at *****.
Sincerely,
Craig M. Burns
Tax Commissioner
AR/1-5927958376.B