Ezel / Tax Rulings / VA
VA P.D. 07-9 Land Preservation Tax Credit 2007-01-09

What did Virginia's 2007 appraisal guidelines require for Land Preservation Tax Credit donations?

Short answer: For donations made on or after January 1, 2007, the credit application had to include a qualified appraisal by a Virginia-licensed qualified appraiser and the statutory appraiser affidavit. The guidelines incorporated federal conservation-appraisal rules, USPAP, and Virginia appraisal regulations, and required detailed disclosure when value relied on a hypothetical future use.

Apply this to your situation

This page answers the general question as of 2007. Ezel answers yours, under current Virginia tax law, with citations.

Currency note: this ruling is from 2007
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: These are official Virginia Department of Taxation general appraisal guidelines adopted January 9, 2007 for Land Preservation Tax Credit donations made on or after January 1, 2007, not a taxpayer-specific ruling. The official page's structured Date Issued field says March 12, 2007; this page uses the document's own adoption date. Incorporated federal, USPAP, licensing, affidavit, documentation, and valuation requirements may have changed. This summary is informational only and is not legal or tax advice.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page as a PDF) is the authoritative source for any reliance.
View original ruling (PDF)

Plain-English summary

Virginia's guidelines required a qualified appraisal and appraiser affidavit with a Land Preservation Tax Credit application for qualifying donations made on or after January 1, 2007. The appraisal had to be prepared by a qualified appraiser licensed in Virginia.

The guidelines incorporated the federal conservation-contribution requirements, applicable federal regulations, the Uniform Standards of Professional Appraisal Practice, and Virginia Real Estate Appraisal Board regulations.

When an appraisal relied on a hypothetical future change in use and departed significantly from a recent sale or comparable-sales value, the affidavit had to identify needed improvements, explain why the future use was likely and feasible, and disclose assumptions used to determine fair market value.

The Department reserved the right to request additional documents, data, and appraisal workpapers.

What this means for you

  • The credit application needed both the appraisal and the statutory affidavit.
  • The appraiser had to meet federal qualification rules and hold a Virginia license.
  • Hypothetical highest-and-best-use valuations required detailed feasibility and assumption disclosures.
  • The Department could demand the appraiser's underlying workpapers.

Citations and references

  • Va. Code §§ 58.1-512.1 and 54.1-2011.
  • IRC § 170(h) and § 170(f)(11)(E).
  • 26 C.F.R. § 1.1704A-14 (as rendered in the official source).
  • 18 VAC 130-20-10 et seq.; Uniform Standards of Professional Appraisal Practice.

Subject

Guidelines for Qualified Appraisals

Source

Original ruling text

Guidelines for Qualified Appraisals

These guidelines are published by the Department of Taxation (TAX) pursuant to Va. Code § 58.1-512.1 to provide guidance to donors and appraisers of land or interests in land qualifying for the Virginia Land Preservation Tax Credit for donations made on or after January 1, 2007.

Incorporated by reference

The following are incorporated into these guidelines in their entirety, as they may be amended from time to time:

· The requirements of § 170(h) of the United States Internal Revenue Code of 1986, as amended (the “IRC), including the applicable regulations, which are located at 26 C.F.R. § 1.1704A-14.

· The Uniform Standards of Professional Appraisal Practice (USPAP), as developed by the Appraisal Standards Board of the Appraisal Foundation.

· The regulations of the Virginia Real Estate Appraisal Board, 18 VAC 130-20-10 et seq.

Requirements

An application for a Land Preservation Tax Credit shall include a copy of the qualified appraisal, as defined in § 170(f)(11)(E) of the IRC, of the qualified donation. The appraisal must be prepared by a qualified appraiser who is licensed in Virginia pursuant to Va. Code § 54.1-2011. The application shall include the affidavit by the appraiser required by subsection C of Va. Code § 58.1-512.1.

If the appraised value is based on a hypothetical future change in use and ignores, or departs significantly from, a value based on a recent sale of the appraised property and comparable sales, then the affidavit shall clearly identify the improvements and other modifications necessary to adapt the actual physical condition of the property on the appraisal date to the hypothetical highest and best use on which the appraised value is based, and shall disclose the facts on which the appraiser based the conclusion that the hypothetical use is both likely to be needed in the near future and feasible, and shall also disclose and explain any assumptions used in determining the fair market value of the donation.

The Department also reserves the right to request any additional documentation or data, including the appraiser’s workpapers.

The Department will revise and update these guidelines as deemed necessary by the Tax Commissioner.

Adopted this _ 9th _ day of January, 2007, effective for donations made on or after January 1, 2007.

_ /s/Janie E. Bowen _

Janie E. Bowen, Tax Commissioner

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