Virginia Virginia Application for a Land Preservation Credit (Instructions)

Virginia Application for a Land Preservation Credit (Instructions)
Form LPC-1 Instructions - Application for a Land Preservation Tax Credit
Instructions for Virginia Form LPC-1,
Application for a Land Preservation Credit
Purpose of Form LPC-1
Individual and corporate taxpayers may claim a credit against
their tax liability for the donation of land or an interest in land
to an eligible public or private conservation agency.
The donation must be conveyed as an unconditional
donation in perpetuity by the taxpayer to an eligible public or
private conservation agency for conservation or preservation
purposes. Additionally, the land or interest in land must
be located in Virginia. Form LPC-1 is used to apply to the
Virginia Department of Taxation (the Department) for a Land
Preservation Tax Credit following an eligible donation. Form
LPC-1 is also used by the Department of Conservation and
Recreation (DCR) in their assessment of conservation value
for tax credits of $1 million or more.
If the Commonwealth or an instrumentality thereof operates
a facility on a conveyance, including charging fees for the
use of such facility, such operation shall not disqualify the
conveyance from eligibility for the tax credit, so long as any
fees are used for conservation or preservation purposes.
If the Commonwealth or an instrumentality thereof enters
into an agreement with a third party to lease or manage
a facility on a conveyance, the fact that such third party is
operated primarily as a business with intent for profit shall not
disqualify the conveyance from eligibility for the tax credit, so
long as such agreement is for conservation or preservation
purposes.
The Department is prohibited from issuing tax credits from
a pool of tax credits attributable to a calendar year prior to
the year in which the complete tax application was filed.
Also, credits must be issued in the order that each complete
application is filed.

DCR Pre-Filing Review
In order to facilitate successful applications for tax credits
of $1 million or more, the Director of DCR offers an optional
review to verify conservation value prior to recordation of the
easement. For more information, call (804) 225-2048.
A donation requesting a credit of $1 million or more
is not eligible for a tax credit until it has been verified
by DCR. If the cap is reached before the Department
receives DCR verification, the credit will be issued for
the next available year. For example, if a 2022 donation
is not verified by DCR before the 2022 cap is met, it will be
issued as a 2023 credit.
The maximum amount of credits that may be issued in a
calendar year may not exceed $75 million. For taxable years
beginning on and after January 1, 2017, but before January 1,
2023, the credit claim limit per taxpayer per taxable year
is $20,000 or the total tax liability, whichever is less. For
taxable years beginning on and after January 1, 2023, the
credit claim limit per taxpayer per taxable year is $50,000 or
the total tax liability, whichever is less. However, for any fee
Va. Dept. of Taxation  4901039  Rev. 05/23

simple donation of land conveyed to the Commonwealth on
or after January 1, 2015, the amount of the credit claimed
is subject a higher limitation of $100,000 per taxpayer for
each taxable year, provided that no part of the charitable
contributions deduction under IRC § 170 related to such fee
simple donation is allowable by reason of a sale or exchange
of property. For taxpayers affected by the credit reductions
for taxable years 2009, 2010, 2011, and 2015 and thereafter,
an additional 3-year carryforward will be added to the credit.
Any unused credit not affected by the credit claim limitation
will retain the original carryforward periods (10 years for
donations originating on or after January 1, 2007).

When to Submit Form LPC-1
To avoid delays in the processing of your annual return,
Form LPC-1 should be submitted to the Department within
90 days following the donation, but at least 90 days before
you file your annual return to claim the credit. Applicants
for tax credits of $1 million or more should apply at least
120 days before filing an annual return. For land or interest
in land conveyed before January 1, 2020, no credit is
allowed unless a complete application has been filed by
December 31 of the 3rd year following the calendar year of
the conveyance. For land or interest in land conveyed on or
after January 1, 2020, a complete application must be filed
by December 31 of the 2nd year following the calendar year
of the conveyance. For conveyances made on and after
January 1, 2017, if verification of conservation value is being
performed by DCR and verification takes more than 90 days,
the deadline to submit Form LPC-1 may be extended for
any number of days during which verification is pending,
provided the application was otherwise complete at the time
of the original filing deadline.
Upon receipt of your completed Form LPC-1, the Department
will record the transaction and provide the credit holder with
a letter acknowledging the credit and a receipt for any fees
paid.
This acknowledgment does not constitute the Department’s
approval of the amount of the Land Preservation Tax Credit
that may be claimed. The amount of the tax credit identified
above is subject to subsequent review and audit by the
Department and may ultimately be disallowed, either in
whole or in part. The stated amount of the tax credit is based
solely upon information supplied by the donor to establish
the fair market value of the donation on which your credit is
based. The value of the donation is subject to challenge by
federal and state tax authorities.
The Department makes no express or implied warranties that
any tax benefits will be available to the donor or to anyone
to whom a Land Preservation Tax Credit is transferred or
re‑transferred. The Department will notify you further only if
any portion of your credit is disallowed or otherwise adjusted.
Such notification may be issued either before or after you

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Virginia Department of Taxation
Tax Credit Unit
P.O. Box 715
Richmond, VA 23218-0715

file an income tax return claiming the credit, subject to the
statute of limitations.
You cannot transfer credit(s) until the Department has issued
you a credit for your donation. The Department is unable
to guarantee that any Form LPC-1 application received in
December will be processed in time to make a transfer in
that year.
In addition, the sale or transfer of tax credits may have
income tax consequences for the credit holder and the
transferee. You are encouraged to consult your attorney, tax
professional, or the Internal Revenue Service for advice.

For general assistance call (804) 786-2992.

DEPARTMENT OF CONSERVATION & RECREATION
The following should be sent to the address below:
•	 A copy of Form LPC-1
•	 Form LPC-1 Schedule B or C (if applicable).
•	 A copy of the recorded deed of donation

Forms to Complete

•	 A copy of the IRS Form 8283
Department of Conservation & Recreation
Office Of Land Conservation
600 East Main Street, 24th Floor
Richmond, VA 23219

•	 Do not complete a separate Form LPC-1 for each
owner of the same donation.
•	 Complete a separate Form LPC-1 for each recorded
deed of donation.
•	 Form LPC-1, Schedule A if there is more than one
credit holder, either because of multiple donors
(including spouses when both are on the deed) of the
donated property or pass-through entity.
•	 Form LPC-1, Schedule B if the tax credit is $1 million
or more, and the donation is a less-than-fee interest
in land.
•	 Form LPC-1, Schedule C if the tax credit is $1 million
or more and the donation is a fee simple interest in
land.
•	 Form LPC-2, Notification of Transfer of Land
Preservation Credit, for all sales or transfers of Land
Preservation Tax Credits.

What to Enclose and Where to Submit Form LPC‑1
VIRGINIA DEPARTMENT OF TAXATION
Applications must include the following enclosures:
•	 A copy of the recorded deed of donation.
•	 A copy of the completed and signed IRS Form 8283.

In addition to the enclosures listed above, applications
for tax credits of $1 million or more must include a copy
of the Baseline Documentation Report for donations of
less‑than‑fee interest.
For assistance regarding Sections IV, V, and Form LPC-1
Schedules B and C, call (804) 371-5218.

Filing Procedures
If you are a pass-through entity and are not allocating any
credit at the time of credit registration, submit a statement on
business letterhead indicating the credit is being retained for
sale or transfer.
All business taxpayers should be registered with the
Department before completing a LPC application. If you
are not registered, complete Form R-1, New Business
Registration Form.
If the donor is an entity that is disregarded for federal income
tax purposes (e.g., a grantor trust or a single-member LLC),
provide copies of your federal tax return and Operating
Agreement that include the donor’s information.

How to Complete Form LPC-1

•	 A copy or CD of the full appraisal.
•	 A signed statement (made under penalty of perjury that
meets the requirements under Va. Code § 8.01-4.3)
or a notarized affidavit from the appraiser stating that
the appraisal complies with Va. Code § 58.1-512.1(C),
which states that: “Any appraisal submitted in support
of an application for a credit under this article shall
include an affidavit by the appraiser that to the best of
his knowledge and belief the valuation complies with
this section and shall set forth in the affidavit or refer
to the specific portion of the appraisal setting forth the
facts and basis for this knowledge and belief.”

Lines not mentioned below are self-explanatory.

Section I – Applicant Information
Complete Section I for all applications.
A)	Applicant Type – Check the box indicating the entity
type of the applicant(s).

•	 Baseline Documentation Report.
The original Form LPC-1, schedules, and enclosures should
be sent to the following address:
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•	 Individual Taxpayer – The donation was made by
a single taxpayer or married taxpayers filing joint
returns in Virginia.
•	 Married Donors – The applicants are married
taxpayers filing joint returns in Virginia and both are
listed as donors on the deed gift of donation.

•	 Multiple Donors – The donation was made by
tenants in common or joint tenants. Complete
Schedule A listing each applicant and their respective
credit amount(s).
•	 Trust / Estate – The applicant is a trust or estate. In
addition, if the trust or estate will be passing the credit
to its beneficiaries, complete Schedule A listing each
person or entity and their respective credit amount(s).
•	 Pass-Through Entity – The applicant is a
partnership, S corporation, limited liability company
or business trust. Complete Schedule A listing each
person or entity and their respective credit amount(s).

Section III – Property and Credit Information
Complete Section III for all applications.
A)	Type of Donation – Check the appropriate box to
indicate the type of donation.
Fee Simple – Provides full rights and title to the land.
Less-Than-Fee Simple – Provides partial rights to a
parcel of land.
B)	 Bargain Sale – Check the appropriate box to indicate if
the transaction was a bargain sale, that is, part donation
and part sale. If yes, also enter the amount received and
provide proof of sale.

•	 Corporation – The applicant is a C corporation.
•	 Nonprofit – The applicant is a nonprofit organization.

You should deduct this amount from the appraised value
of the donation (Section III (N)).

•	 Other Entity – All other entity types. Specify the entity
type in the space provided. Complete Form LPC-1,
Schedule A, if applicable. If entity is considered a
disregarded entity by the IRS, provide a copy of the
classification letter and a copy of your federal Form
1040, Schedule C, or IRS Form 8832.

C)	 Number of Acres – Enter the number of acres of donated
land or interest in land.

B)	Applicant Name – Enter the applicant’s name(s) as
shown on the deed.

E) 	Property Street Address – The address provided must
be the physical location of the land. The land must be
located in Virginia. Do not enter a post office box.

C)	 Applicant Identification Number – Enter each
applicant’s Social Security number (SSN) or federal
employer identification number (FEIN). If the donation
was owned jointly by married taxpayers, complete
Schedule A. The FEIN is required for pass-through
entities and corporations.
E)	 Contact Name – Enter the name of the person, if different
than the applicant, the Department should contact to
answer questions regarding the information provided on
Form LPC-1.
F)	 Phone Number – Enter the telephone number for either
the applicant or the contact listed in Section I (E).

Section II – Donation Questions
A)	 Donations Made on or After January 1, 2007
	

If you, a family member, or an affiliate were granted a
credit for any portion of the recorded parcel of land within
the preceding 11 years, the donation must be verified by
DCR when the aggregate of such credits (including the
credit requested on this application) is $1 million or more.
For additional information, see Va. Code § 58.1‑512(D)
(3)(b).

B)	 Donations Made on or After July 1, 2010 – Complete
Section II-A and Section II-B.
For credit requests of $250,000 or more, the donation
must be verified by DCR if the land that is the subject of
the current donation was ever partitioned from or part of
another parcel of land and the other portion of the original
parcel was granted a Land Preservation Credit or has an
application pending within 3 years of this donation. For
additional information, see Va. Code § 58.1‑512(D)(3)(c).

D) 	Date Acquired – Enter the date that the donated land
was acquired by the applicant. If property acquired within
one year of recorded gift, provide a copy of the settlement
statement.

F) 	 Property Information – Enter the current zoning,
highest and best use before donation, tax map, or PIN
and locality for the donated property.
G) 	
Name(s) of Eligible Conservation Agency(ies)
Receiving Donation – Enter the name(s) of the eligible
conservation agency(ies) that received the donation.
H) 	Jurisdiction(s) Donation Was Recorded – Enter the
name of the locality(ies) in Virginia where the transfer of
the land or interest in land was recorded.
I)	 Date Recorded – Enter the date the transfer of the land,
or interest in land, was recorded.
J)	 Appraisal Company Name – Enter the name of the
company that appraised the donated land, or interest in
land.
K)	 Company’s FEIN or SSN – Enter the FEIN or SSN of
the company that appraised the donated land, or interest
in land.
L)	 Appraisal Evaluation Date – Enter the date that the
appraisal for the donated land or interest in land was
finalized.
M)	Appraisal Report Date – Enter the date the appraiser
signed the appraisal.
N)	 Appraised Value of Donation – Enter the fair market
value of the land or interest in land that is being donated.
The fair market value is the “qualified appraisal” as
prepared by a “qualified appraiser,” as those terms are
defined under applicable federal law, under § 170(h)
of the United States Internal Revenue Code of 1986
as amended and regulations governing charitable
contributions.

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O)	 Credit Amount Requested – For donations made after
January 1, 2007, the credit is 40% of the actual appraised
value of the donation.

“Production agriculture and silviculture” means the bona
fide production or harvesting of agricultural or silvicultural
products, but does not include the processing of
agricultural or silvicultural products or the above ground
application or storage of sewage sludge.

P)	 Assessed Value of Land Per Acre – Enter the most
recent assessed value per acre of the donated land prior
to donation as determined by the real estate assessor for
the locality in which the land is located. This should not
include improvements (dwellings) unless it is a qualifying
historic structure.
Q)	 Appraised Value Per Acre – Enter the appraised value
per acre of the donation/gift using the qualified appraisal
value recorded in Section III (N). To calculate: divide
appraised value of donation by the number of acres
(N/C). This should not include improvements (dwellings)
unless it is a qualifying historic structure.

Section IV - Conservation Information for Reporting
Purposes
Note: The phrase “conservation easement,” as used in these
instructions and in Form LPC-1, includes both open-space
easements pursuant to Va. Code § 10.1‑1700 et seq. and
conservation easements pursuant to Va. Code § 10.1‑1009.
A)	Conservation Purpose – For definitions of these
conservation purposes, see Form LPC-1, Schedule
B, Section I, and the instructions for Form LPC-1,
Schedule B.
The donated land or conservation easement must
be conveyed for at least one of the conservation
purposes specified in Va. Code § 58.1-512(A). Identify
the conservation purposes protected by the donation
by checking the applicable boxes on Form LPC-1,
Section IV, and specify the acreage of each use indicated.
All identified conservation purposes must meet the
Virginia Land Conservation Foundation Conservation
Value Review Criteria. The criteria can be found here:
dcr.virginia.gov/virginia-land-conservation-foundation/
document/lptccrit08.pdf.
C)	 Riparian Buffers – If riparian buffers are required in the
deed of easement, then indicate the total length of the
water bodies (in linear feet) protected with at least a 35foot wide buffer. If applicable, include each side of the
water body.
“Forested/vegetated buffer” means a strip of land
adjoining a watercourse that contains trees or other
woody vegetation.
“No-plow buffer” means a strip of land adjoining a
watercourse that is not plowed, but is managed to maintain
non-woody vegetation (e.g. pasture, grasslands).
D)	Land Currently Being Used for Agricultural and
Silviculture Production – Indicate the estimated number
of acres of land currently being used in agriculture and
silviculture production.

“Silviculture” is the commercial farming of trees.
“Agriculture” is production of crops, or animals, or fowl
including the production of fruits and vegetables of all
kinds; meat, dairy, and poultry products; and nuts,
tobacco, nursery, and floral products.
E)	 Onsite Operational Water Quality Best Management
Practices – Indicate the type of agriculture and silviculture
best management currently being practiced and if the
deed requires continued practice. Also, provide the
practice number for the practice name. (See agriculture
and silviculture tables at the end of these instructions.)

Section V – Fee Simple Donation
A)	 Gift to Conservation Agency – If the donation is a gift
in fee simple to a public or private conservation agency,
provide the name of the agency. If the application is for
$1 million or more in tax credits, also complete Form
LPC‑1, Schedule C.
B)	 Gift to Holder – If the donation is a gift in fee simple
to a “holder” as defined in Va. Code § 10.1-1009,
indicate that documentation is enclosed showing that the
organization agrees that subsequent conveyances of fee
simple interest in the property will be made subject to
a conservation or open-spaced easement, or made to
the Commonwealth of Virginia or a federal conservation
agency.

Section VI – Less-Than-Fee Simple Donation
This section should be completed by the applicant describing
how the donation meets the requirements of § 170(h) of the
United States Internal Revenue Code of 1986, as amended.
Describe how the donation provides conservation value:
preserves wildlife, water quality, perpetual conservation
and open space, scenic enjoyment, etc. Most easements
are less-than-fee simple because they provide partial rights
to a parcel of land. A fee simple interest provides full rights
and title to the land. The Department cannot accept any
referrals to the deed of gift.

Section VII – Declaration, Signature and Notarization
The applicant is required to sign Form LPC-1 in the presence
of a Notary Public. Review the declaration carefully before
signing Form LPC-1. For joint donors, each donor must sign
Page 3. Enclose additional pages, if needed. If the donor is
a pass-through entity, only one signature is required.

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Virginia Agricultural Best Management Practices for Water Quality
For detailed definitions of each BMP, visit www.dcr.virginia.gov.
Practice
Number

Practice
Number

Practice Name

CCI-FRB-1

Continuing Conservation Initiative
Forested Riparian Buffer

CCI-HRB-1

Continuing Conservation Initiative
Herbaceous Riparian Buffer

CCI-SE-1

Continuing Conservation Initiative
Stream Exclusion

CP-21

Practice Name

SL-1W

Permanent Vegetative Cover on Cropland
Wildlife Option

SL-3

Stripcropping Systems

SL-3B

Buffer Stripcropping

SL-3W

Buffer Stripcropping/Wildlife

CREP Filter Strip (Rental only)

SL-4

Terrace System

CP-22

CREP Riparian Forest Buffer (Rental only)

SL-5

Diversion

CP-23

CREP Wetland Restoration (Rental only)

SL-6

Grazing Land Protection

CP-23B

CREP Wetland Restoration Bonus

SL-6A

Small Acreage Grazing System

CP-29

CREP Wildlife Habitat Buffer (Rental only)

SL-6B

Alternative Water System

CRFR-3

CREP Riparian Forest Buffer

SL-7

Extension of CREP Watering Systems

CRLF-1

CREP Buffer Length Recording

SL-8

Protective Cover for Specialty Crops

CRSL-6

CREP Grazing Land Protection

SL-8B

CRWP-2

CREP Streambank Protection – Fencing

Small Grain Cover Crop for Nutrient
Management

CRWQ-1

CREP Grass Filter Strips

SL-8H

Harvestable Cover Crop

CRWQ-6B

CREP Wetland Restoration

SL-11

Permanent Vegetative Cover on Critical
Areas

CRWQ-11

CREP Agricultural Sinkhole Protection

FR-1

Reforestation of Erodible Crop and
Pastureland

SL-11B

Farm Road or Heavy Traffic Animal Travel
lane Stabilization

SL-15A

Continuous No-Till System

FR-3

Woodland Buffer Filter Area

FR-4

Woodland Erosion Stabilization

SL-15B

Continuous No-Till Forage Production
System

LE-2

Livestock Exclusion with Reduced Setback

WL-1

Field Borders /Wildlife Option

LT-CNT

Long Term Continuous No Till Planting
Systems

WL-2

Idle Land / Wildlife Option

WL-3

Fescue Conversion /Wildlife Option

NM-1

Three Year Contract for Nutrient Management
Plan Writing and Revisions

WP-1

Sediment Retention, Erosion or Water
Control Structures

NM-2

Three Year Contract for Nutrient Management
Plan Implementation and Record Keeping

WP-2

Stream Protection

NM-3

Sidedress Application of Nitrogen on Corn

WP-2A

Streambank Stabilization

WP-2B

Stream Crossings & Hardened Access

NM-3B

Organic Nutrient Application to Corn Using
Pre-Sidedress Nitrate Test to Determine
Need for Sidedress Nitrogen

WP-2C

Stream Channel Stabilization

WP-2D

Maintenance of Stream Exclusion Fencing

NM-4

Late Winter Split Application of Nitrogen on
Small Grain

WP-2W

Vegetation Establishment for Stream
Protection /Wildlife Option

SE-1

Vegetative Stabilization of Marsh Fringe
Areas

WP-3

Sod Waterway

SE-2

Shoreline Stabilization

WP-4

Animal Waste Control Facility

WP-4B

Loafing Lot Management System

SL-1 (State) Permanent Vegetative Cover on Cropland

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Virginia Agricultural Best Management Practices for Water Quality
For detailed definitions of each BMP, visit www.dcr.virginia.gov.
Practice
Number

Practice
Number

Practice Name

Practice Name

WP-4C

Composting Facilities

WQ-1W

Filter Strips /Wildlife Option

WP-4D

Soil Test in Support of Nutrient Management
Plan

WQ-4

Legume Cover Crop

WP-4E

Animal Waste Structure Pumping Equipment

WQ-5

Water Table Control Structure

WP-4F

Animal Mortality Incinerator Facility

WQ-6

Constructed Wetlands

WP-5

Stormwater Retention Pond

WQ-6B

Wetland Restoration

WQ-7

Irrigation Water Recycling System

WP-6

Agricultural Chemical & Fertilizer Handling
Facility

WQ-8

Fuel Storage Treatment

WP-7

Surface Water Runoff Impoundment for
Water Quality

WQ-9

Capping/Plugging of Abandoned Wells

WQ-10

Integrated Pest Management

WP-8

Relocation of Confined Feeding Operations
from Environmentally Sensitive Areas

WQ-11

Agricultural Sinkhole Protection

WQ-1

Grass Filter Strips

Virginia Silviculture Best Management Practices for Water Quality
For detailed definitions of each BMP, visit www.dof.virginia.gov.
Practice
Number

Practice Name

Practice
Number

Practice Name

FO-1

Forest Roads

F O-12

Rock Check Dams

F O-2

Skid Trails

F O-13

Mulching

F O-3

Wing (Lead Off) Ditches

F O-14

Soil Stabilization Blankets and Matting

F O-4

Culvert Sizes for Cross-Drainage of Roads

F O-15

Straw Bale Barrier

F O-5

Broad Based Dip

F O-16

Silt Fence

F O-6

Rolling Dip 

F O-17

Brush Barriers

F O-7

Water Bar

F O-18

Surface Roughening

F O-8

Temporary Fill Diversion

F O-19

Geotextile

F O-9

Temporary Slope Drain

F O-20

Geo Web®

F O-10

Level Spreader

F O-21

Logging Entrance

F O-11

Temporary Sediment Trap

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