New Tax Credit Offers Landowners Fair Market Value for National Scenic Trail Donations

The Complete America’s Great Trails Act creates a new federal tax credit designed to help finish the country’s network of long-distance hiking trails. Under Section 2, landowners who donate property that includes a National Scenic Trail—and a surrounding buffer zone—can claim a tax credit equal to the fair market value of that land. This isn't just a small deduction; the bill specifies that the value should reflect the property's "highest and best use," meaning if your land could have been a housing development, the credit should reflect that price tag. To qualify, the donated corridor must generally be at least 50 feet wide on both sides of the trail but no more than a half-mile wide (2,640 feet). This credit can be used to wipe out federal income tax liability, and if the credit is larger than what you owe in a single year, you can carry the remaining balance forward for up to ten years.

The Backyard Buffer

For a farmer or a rural homeowner, this bill offers a way to preserve the landscape without losing the entire economic value of the dirt. A key provision ensures that you don't have to stop using the land just because you took the credit. Section 2 states that the donation won't be disqualified if you continue using the area for recreation or agriculture, as long as those activities don't "impair significant conservation interests." For example, if you have a trail running through your back forty, you could potentially still graze cattle or use your own access roads while the public enjoys the trail corridor. However, there is some fine print: you have to choose between this new credit and a traditional charitable deduction—you can’t double-dip on both for the same piece of land.

Valuation and Long-Term Stakes

While the bill aims to speed up trail completion, it introduces some complex math for the IRS and landowners to navigate. Determining the "highest and best use" for a narrow strip of trail land can be tricky and may lead to disagreements between property owners and the government over exactly how much that credit is worth. Additionally, because the credit is treated as a general business credit for income-producing land, it’s a more powerful tool for working farms or timberlands than for casual hobbyists. The bill also looks toward the future, requiring the Secretary of the Interior to report back in four years on whether this credit should be made "refundable"—which would mean getting a check back from the government even if you don't owe any taxes—or "transferable," allowing you to sell the credit to someone else for cash.