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• The decedent or a member of the decedent's family must have owned the land for the 3-year period ending on the date of the decedent's death. • No later than the date the election is made, a qualified conservation easement on the land has been made by the decedent, a member of the decedent's family, the executor of the decedent's estate, or the trustee of a trust that holds the land. • The land is located in the United States or one of its possessions. Member of Family Members of the decedent's family include the decedent's spouse; ancestors; lineal descendants of the decedent, of the decedent's spouse, and of the parents of the decedent; and the spouse of any lineal descendant. A legally adopted child of an individual is considered a child of the individual by blood. Indirect Ownership of Land The qualified conservation easement exclusion applies if the land is owned indirectly through a partnership, corporation, or trust, if the decedent owned (directly or indirectly) at least 30% of the entity. For the rules on determining ownership of an entity, see Ownership rules next. Ownership rules. An interest in property owned, directly or indirectly, by or for a corporation, partnership, or trust is considered proportionately owned by or for the entity's shareholders, partners, or beneficiaries. A person is the beneficiary of a trust only if he or she has a present interest in the trust. For additional information, see the ownership rules in section 2057(e)(3). Qualified Conservation Easement A qualified conservation easement is one that would qualify as a qualified conservation contribution under section 170(h). It must be a contribution: • Of a qualified real property interest, • To a qualified organization, and • Exclusively for conservation purposes. Qualified real property interest. A qualified real property interest is any of the following. • The entire interest of the donor, other than a qualified mineral interest. • A remainder interest. • A restriction granted in perpetuity on the use that may be made of the real property. The restriction must include a prohibition on more than a de minimis use for commercial recreational activity. Qualified organization. A qualified organization includes the following. • Corporations and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition, or for the prevention of cruelty to children or animals, without net earnings benefitting any individual shareholder and without activity with the purpose of influencing legislation or political campaigning, which: a. Receives more than one-third of its support from gifts, contributions, membership fees, or receipts from sales, admissions fees, or performance of services; or b. Is controlled by such an organization. • Any entity that qualifies under section 170(b)(1)(A)(v) or (vi). Conservation purpose. An easement has a conservation purpose if it is for: • The preservation of land areas for outdoor recreation by, or for the education of, the public; • The protection of a relatively natural habitat of fish, wildlife, or plants, or a similar ecosystem; or • The preservation of open space (including farmland and forest land) where such preservation is for the scenic enjoyment of the general public, or under a clearly delineated federal, state, or local conservation policy and will yield a significant public benefit. Specific Instructions Line 1 If the land is reported as one or more item numbers on a Form 706 schedule, simply list the schedule and item numbers. If the land subject to the easement is only part of an item, however, list the schedule and item number and describe the part subject to the easement. See the instructions for Schedule A—Real Estate, earlier, for information on how to describe the land. Line 3 Using the general rules for describing real estate, provide enough information so the IRS can value the easement. Give the date the easement was granted and by whom it was granted. Line 4 Enter on this line the gross value at which the land was reported on the applicable asset schedule on this Form 706. Do not reduce the value by the amount of any mortgage outstanding. Report the estate tax value even if the easement was granted by the decedent (or someone other than the decedent) prior to the decedent's death. Note. If the value of the land reported on line 4 was different at the time the easement was contributed from that reported on Form 706, see the Caution at the beginning of the Schedule U instructions. Line 5 The amount on line 5 should be the date of death value of any qualifying conservation easements granted prior to the decedent's death, whether granted by the decedent or someone other than the decedent, for which the exclusion is being elected. Note. If the value of the easement reported on line 5 was different at the time the easement was contributed than at the date of death, see the Caution at the beginning of the Schedule U instructions. Line 7 You must reduce the land value by the value of any development rights retained by the donor in the conveyance of the easement. A development right is any right to use the land for any commercial purpose that is not subordinate to or directly supportive of the use of the land as a farm for farming purposes. Note. If the value of the retained development rights reported on line 7 was different at the time the easement was contributed than at the date of death, see the Caution at the beginning of the Schedule U instructions. You do not have to make this reduction if everyone with an interest in the land (regardless of whether in possession) agrees to permanently extinguish the retained development right. The agreement must be filed with this return and must include all of the following information and terms. 1. A statement that the agreement is made under section 2031(c)(5). 2. A list of all persons in being holding an interest in the land that is subject to the qualified conservation easement. Include each person's name, -48- Instructions for Form 706 (Rev. 09-2021)