A conservation easement is a gift of partial interest in real estate to a public supported charity or government. A taxpayer can gift his interest in the property and if the value of the charitable gift is greater than the 50% annual gift limitation, the excess gift can be carried over for up to 15 years.
The parents reduced their taxable income by $5,000 by using a conservation easement to obtain a charitable tax deduction. Since the parents income was taxed at the 30% tax bracket, the income reduction may decrease their income taxes by $1,500 ($5,000 x 30%).
If you are in a combined (federal, self-employment, and state) tax bracket of 30%, you could reduce your taxes up to $300 for every $1,000 of income reduction by using a conservation easement to obtain a charitable tax deduction.