Facade Easements and Tax Credit
The stresses of tax season can often cause taxpayers to overlook tax credits they would have otherwise been entitled to. One such tax credit you may be eligible for is the tax deduction for facade easements. If you own a historic home or building and are intent on preserving its facade, you may be able to claim this on your next tax return.
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Facade Easements
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A facade easement is meant to preserve a historical building or structure by restricting changes to the facade. In order for a facade easement to be tax deductible, the owner of the historic structure must promise that he won't change the facade of the structure without permission. This promise is given as a "donation," or easement, to a preservation organization. Facade easements are classified as charitable contributions by the Internal Revenue Service and are thus tax deductible.
Certified Historic Structures
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Not every facade easement can qualify for a tax deduction. For a facade easement to be eligible for the tax credit, the IRS requires that it be a "certified historic structure," which consists of any structures listed in the National Register, or "any building located in a registered historic district and certified by the Secretary of Interior as being of historic significance to the district," according to the IRS. Qualified structures can be used as personal residences, and for business or nonbusiness purposes.
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Visual Access
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In order to qualify for the charitable contribution tax credit, facade easements must also be visually accessible to the general public, according to the IRS. This can include the public clearly viewing a historic residence or historic place of business from the street. If the public does not have access to view the structure in question, the owner claiming the tax credit for the easement must allow "regular viewing" of the facade. For example, if you own a historic home that is tucked back on many acres of land, you must allow special viewing times for the public to see the building.
Filing
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It's free to claim a deduction for your facade easement if your total is under $10,000. If you claim a more than $10,000 easement, the IRS requires that you pay a $500 filing fee with your tax return. To file for a facade easement, you must fill out Form 8283-V, along with a payment voucher for your fee. If your claim is over $10,000 and you pay the $500 fee electronically, the IRS does not require you to fill out and return Form 8283-V.
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References
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