Democratic gubernatorial candidate John Hickenlooper paid $52,486 to the Internal Revenue Service in 2008 to settle issues surrounding tax credits he received on conservation easements, according to a television report Tuesday.
Hickenlooper’s payment to the IRS was an adjustment to the property valuation of conservation easements, which were on land that Hickenlooper and a partner acquired in 2000 through a land swap with the U.S. Forest Service, Denver’s KMGH-TV reported. About 590 acres in six counties were exchanged for 660 acres of forest land in Park County.
The Forest Service valued the land it received from Hickenlooper and his partner at $1.07 million and the land provided to the two at $884,000, according to forest service records. The service paid the difference in cash.
The land Hickenlooper and his partner got was appraised during the exchange at an average of less than $1,400 per acre, according to the appraisal. Two years later, the land was appraised at more than $6,000 when a portion was offered to the Nature Conservancy as a conservation easement, which limits development in exchange for tax credits.
About 70 acres of the land Hickenlooper received from the Forest Service also sold for $7,500 an acre in 2006, according to his campaign staff.
State tax credits for easements have been scrutinized after some appraisers were accused of inflating land values. Landowners have sued, saying the Colorado Department of Revenue unfairly challenged tax credits and deductions they took after donating conservation easements. They have said appraisers who falsely inflated property values should be held responsible.
The station said documents provided by Hickenlooper show that he received more than $1.1 million in federal tax write-offs for the easements.
Hickenlooper defended counting the easements as charitable contributions and the property appraisal. He said that appraiser Mark Weston is now a member of the state’s Conservation Easement Oversight Commission.
Weston told KMGH that his appraisal wasn’t inflated. “There have been abuses of this program,” Weston said. “This is not one of them.”
Hickenlooper said Park County residents were concerned the federal land, surrounded by private land, would be subdivided for residential development.
“Conservation easements are a critical tool for preserving land and wildlife habitat in Colorado, and John is extremely proud that he was able to permanently preserve this land and donate it under a conservation easement,” campaign spokesman George Merritt said.
The Colorado Coalition of Land Trusts complained in 2008 of the IRS’ nationwide notice of improper claims of charitable deductions involving conservation easements and audits. The group questioned the values the agency assigned to some of the land.
“Everything about the deal to preserve this land was done to the highest standards of this important program,” Merritt said.