{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/58.1-513.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/58.1-513.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/58.1-513.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/58.1-513.html"}],"law_id":63964,"edition_id":1,"section_id":63964,"structure_id":16129,"section_number":"58.1-513","catch_line":"Limitations; transfer of credit; gain or loss from tax credit","history":"1999, cc. 968, 983; 2002, c. 347; 2004, c. 635; 2005, c. 255; 2006, Sp. Sess. I, cc. 4, 5; 2010, cc. 229, 248; 2012, c. 232; 2017, cc. 444, 725; 2018, c. 560.","full_text":"A\n\nAny taxpayer claiming a tax credit under this article shall not claim a credit under any similar Virginia law for costs related to the same project. To the extent a credit is taken in accordance with this article, no subtraction allowed for the gain on the sale of (i) land dedicated to open-space use or (ii) an easement dedicated to open-space use under subdivision 14 of § 58.1-322.02 shall be allowed for three years following the year in which the credit is taken. Any building which serves as the basis, in whole or in part, of a tax credit under this article shall not serve as the basis of the tax credit allowed under § 58.1-339.2 for a period of five years following the donation on which the credit is based; and any building which serves as the basis for the tax credit allowed under § 58.1-339.2 shall not serve as the basis, in whole or in part, for a tax credit under this article for a period of five years following the completion of the rehabilitation project on which the credit is based.B\n\nAny tax credits that arise under this article from the donation of land or an interest in land made by a pass-through tax entity such as a trust, estate, partnership, limited liability company or partnership, limited partnership, subchapter S corporation or other fiduciary shall be used either by such entity if it is the taxpayer on behalf of such entity or by the member, manager, partner, shareholder or beneficiary, as the case may be, in proportion to their interest in such entity in the event that income, deductions and tax liability pass through such entity to such member, manager, partner, shareholder or beneficiary or as set forth in the agreement of said entity. Such tax credits shall not be claimed by both the entity and the member, manager, partner, shareholder or beneficiary for the same donation.C\n\n1. Any taxpayer holding a credit under this article may transfer unused but otherwise allowable credit for use by another taxpayer on Virginia income tax returns. A taxpayer who transfers any amount of credit under this article shall file a notification of such transfer to the Department in accordance with procedures and forms prescribed by the Tax Commissioner.2\n\nA fee of two percent of the value of the donated interest shall be imposed upon any transfer arising from the sale by any taxpayer of credits under this article and upon the distribution of a portion of credits under this article to a member, manager, partner, shareholder or beneficiary pursuant to subsection B. The two percent fee shall not apply to a distribution of credits to a nonresident owner of a pass-through entity when such credits are applied by the pass-through entity to the withholding tax pursuant to subdivision B 2 of § 58.1-486.2. Revenues generated by such fees first shall be used by the Department of Taxation and the Department of Conservation and Recreation for their costs in implementing this article but in no event shall such amount exceed 50 percent of the total revenue generated by the fee on an annual basis. The remainder of such revenues shall be transferred to the Virginia Land Conservation Fund for distribution to the public or private conservation agencies or organizations, excluding federal governmental entities, that are responsible for enforcing the conservation and preservation purposes of the donated interests. Distribution of such revenues shall be made annually by the Virginia Land Conservation Foundation proportionally based on a three-year average of the number of donated interests accepted by the public or private conservation agencies or organizations, excluding federal governmental entities, during the immediately preceding three-year period.3\n\nIf the individual taxpayer who originally earned the tax credit holds unused credit under this article, he may provide through a will, bequest, or other instrument of transfer that, upon his death, his unused credit shall be transferred to a designated beneficiary. If such taxpayer dies without a will, his unused credit shall be transferred to the next person who is eligible to receive according to the rules of intestate succession as described in § 64.2-200; however, if two or more persons are eligible to receive according to such rules, the administrator of the taxpayer’s estate shall choose one such person to whom to transfer such taxpayer’s unused credit. The two percent fee described in subdivision 2 shall not apply to a transfer of unused credits pursuant to this subdivision. The carryover period for such transferred credits shall not be extended; instead, such credits shall be subject to the original carryover period as determined pursuant to subdivision C 1 of § 58.1-512.D\n\nTo the extent included in and not otherwise subtracted from federal adjusted gross income pursuant to § 58.1-322.02 or federal taxable income pursuant to § 58.1-402, there shall be subtracted any amount of gain or income recognized by a taxpayer on the application of a tax credit under this article against a Virginia income tax liability.E\n\nThe transfer of the credit and its application against a tax liability shall not create gain or loss for the transferor or the transferee of such credit.F\n\nA pass-through tax entity, such as a partnership, limited liability company or Subchapter S corporation, may appoint a tax matters representative, who shall be a general partner, member\/manager or shareholder, and register that representative with the Tax Commissioner. The Tax Commissioner shall be entitled to deal with the tax matters representative as representative of the taxpayers to whom credits have been allocated or transferred by the entity under this article with respect to those credits. In the event a pass-through tax entity allocates or transfers tax credits arising under this article to its partners, members or shareholders and the allocated or transferred credits shall be disallowed, in whole or in part, such that an assessment of additional tax against a taxpayer shall be made, the Tax Commissioner shall first make written demand for payment of any additional tax, together with interest and penalties, from the tax matters representative. In the event such payment demand is not satisfied, the Tax Commissioner shall proceed to collection against the taxpayers in accordance with the provisions of Chapter 18 (§ 58.1-1800 et seq.).","order_by":null,"text":{"0":{"id":232935,"text":"Any taxpayer claiming a tax credit under this article shall not claim a credit under any similar Virginia law for costs related to the same project. To the extent a credit is taken in accordance with this article, no subtraction allowed for the gain on the sale of (i) land dedicated to open-space use or (ii) an easement dedicated to open-space use under subdivision 14 of § 58.1-322.02 shall be allowed for three years following the year in which the credit is taken. Any building which serves as the basis, in whole or in part, of a tax credit under this article shall not serve as the basis of the tax credit allowed under § 58.1-339.2 for a period of five years following the donation on which the credit is based; and any building which serves as the basis for the tax credit allowed under § 58.1-339.2 shall not serve as the basis, in whole or in part, for a tax credit under this article for a period of five years following the completion of the rehabilitation project on which the credit is based.","type":"section","prefixes":["A"],"prefix":"A","entire_prefix":"A","prefix_anchor":"A","level":1,"next_prefix":"B"},"1":{"id":232936,"text":"Any tax credits that arise under this article from the donation of land or an interest in land made by a pass-through tax entity such as a trust, estate, partnership, limited liability company or partnership, limited partnership, subchapter S corporation or other fiduciary shall be used either by such entity if it is the taxpayer on behalf of such entity or by the member, manager, partner, shareholder or beneficiary, as the case may be, in proportion to their interest in such entity in the event that income, deductions and tax liability pass through such entity to such member, manager, partner, shareholder or beneficiary or as set forth in the agreement of said entity. Such tax credits shall not be claimed by both the entity and the member, manager, partner, shareholder or beneficiary for the same donation.","type":"section","prefixes":["B"],"prefix":"B","entire_prefix":"B","prefix_anchor":"B","level":1,"prior_prefix":"A","next_prefix":"C"},"2":{"id":232937,"text":"1. Any taxpayer holding a credit under this article may transfer unused but otherwise allowable credit for use by another taxpayer on Virginia income tax returns. A taxpayer who transfers any amount of credit under this article shall file a notification of such transfer to the Department in accordance with procedures and forms prescribed by the Tax Commissioner.","type":"section","prefixes":["C"],"prefix":"C","entire_prefix":"C","prefix_anchor":"C","level":1,"prior_prefix":"B","next_prefix":"C2"},"3":{"id":232938,"text":"A fee of two percent of the value of the donated interest shall be imposed upon any transfer arising from the sale by any taxpayer of credits under this article and upon the distribution of a portion of credits under this article to a member, manager, partner, shareholder or beneficiary pursuant to subsection B. The two percent fee shall not apply to a distribution of credits to a nonresident owner of a pass-through entity when such credits are applied by the pass-through entity to the withholding tax pursuant to subdivision B 2 of § 58.1-486.2. Revenues generated by such fees first shall be used by the Department of Taxation and the Department of Conservation and Recreation for their costs in implementing this article but in no event shall such amount exceed 50 percent of the total revenue generated by the fee on an annual basis. The remainder of such revenues shall be transferred to the Virginia Land Conservation Fund for distribution to the public or private conservation agencies or organizations, excluding federal governmental entities, that are responsible for enforcing the conservation and preservation purposes of the donated interests. Distribution of such revenues shall be made annually by the Virginia Land Conservation Foundation proportionally based on a three-year average of the number of donated interests accepted by the public or private conservation agencies or organizations, excluding federal governmental entities, during the immediately preceding three-year period.","type":"section","prefixes":["C","2"],"prefix":"2","entire_prefix":"C2","prefix_anchor":"C2","level":2,"prior_prefix":"C","next_prefix":"C3"},"4":{"id":232939,"text":"If the individual taxpayer who originally earned the tax credit holds unused credit under this article, he may provide through a will, bequest, or other instrument of transfer that, upon his death, his unused credit shall be transferred to a designated beneficiary. If such taxpayer dies without a will, his unused credit shall be transferred to the next person who is eligible to receive according to the rules of intestate succession as described in § 64.2-200; however, if two or more persons are eligible to receive according to such rules, the administrator of the taxpayer’s estate shall choose one such person to whom to transfer such taxpayer’s unused credit. The two percent fee described in subdivision 2 shall not apply to a transfer of unused credits pursuant to this subdivision. The carryover period for such transferred credits shall not be extended; instead, such credits shall be subject to the original carryover period as determined pursuant to subdivision C 1 of § 58.1-512.","type":"section","prefixes":["C","3"],"prefix":"3","entire_prefix":"C3","prefix_anchor":"C3","level":2,"prior_prefix":"C2","next_prefix":"D"},"5":{"id":232940,"text":"To the extent included in and not otherwise subtracted from federal adjusted gross income pursuant to § 58.1-322.02 or federal taxable income pursuant to § 58.1-402, there shall be subtracted any amount of gain or income recognized by a taxpayer on the application of a tax credit under this article against a Virginia income tax liability.","type":"section","prefixes":["D"],"prefix":"D","entire_prefix":"D","prefix_anchor":"D","level":1,"prior_prefix":"C3","next_prefix":"E"},"6":{"id":232941,"text":"The transfer of the credit and its application against a tax liability shall not create gain or loss for the transferor or the transferee of such credit.","type":"section","prefixes":["E"],"prefix":"E","entire_prefix":"E","prefix_anchor":"E","level":1,"prior_prefix":"D","next_prefix":"F"},"7":{"id":232942,"text":"A pass-through tax entity, such as a partnership, limited liability company or Subchapter S corporation, may appoint a tax matters representative, who shall be a general partner, member\/manager or shareholder, and register that representative with the Tax Commissioner. The Tax Commissioner shall be entitled to deal with the tax matters representative as representative of the taxpayers to whom credits have been allocated or transferred by the entity under this article with respect to those credits. In the event a pass-through tax entity allocates or transfers tax credits arising under this article to its partners, members or shareholders and the allocated or transferred credits shall be disallowed, in whole or in part, such that an assessment of additional tax against a taxpayer shall be made, the Tax Commissioner shall first make written demand for payment of any additional tax, together with interest and penalties, from the tax matters representative. In the event such payment demand is not satisfied, the Tax Commissioner shall proceed to collection against the taxpayers in accordance with the provisions of Chapter 18 (§ 58.1-1800 et seq.).","type":"section","prefixes":["F"],"prefix":"F","entire_prefix":"F","prefix_anchor":"F","level":1,"prior_prefix":"E"}},"ancestry":[{"id":16129,"edition_id":1,"name":"Virginia Land Conservation Incentives Act of 1999","identifier":"20.1","label":"article","depth":4,"order_by":1,"parent_id":13152,"metadata":{},"date_created":"2026-06-26 04:07:01","date_modified":"2026-06-26 04:07:01","permalink":{"id":254051,"object_type":"structure","relational_id":16129,"identifier":"20.1","token":"58.1\/I\/3\/20.1","url":"\/58.1\/I\/3\/20.1\/","edition_id":1,"permalink":0,"preferred":1}},{"id":13152,"edition_id":1,"name":"Income Tax","identifier":"3","label":"chapter","depth":3,"order_by":1,"parent_id":12837,"metadata":{},"date_created":"2026-06-26 03:44:21","date_modified":"2026-06-26 03:44:21","permalink":{"id":253267,"object_type":"structure","relational_id":13152,"identifier":"3","token":"58.1\/I\/3","url":"\/58.1\/I\/3\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12837,"edition_id":1,"name":"Taxes Administered by the Department of Taxation","identifier":"I","label":"subtitle","depth":2,"order_by":1,"parent_id":12703,"metadata":{},"date_created":"2026-06-26 03:43:55","date_modified":"2026-06-26 03:43:55","permalink":{"id":252075,"object_type":"structure","relational_id":12837,"identifier":"I","token":"58.1\/I","url":"\/58.1\/I\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12703,"edition_id":1,"name":"Taxation","identifier":"58.1","label":"title","depth":1,"order_by":1,"parent_id":null,"metadata":{},"date_created":"2026-06-26 03:43:49","date_modified":"2026-06-26 03:43:49","permalink":{"id":251959,"object_type":"structure","relational_id":12703,"identifier":"58.1","token":"58.1","url":"\/58.1\/","edition_id":1,"permalink":0,"preferred":1}}],"structure_contents":[{"id":81976,"structure_id":16129,"section_number":"58.1-510","catch_line":"Purpose","url":"\/58.1-510\/","token":"58.1\/I\/3\/20.1\/58.1-510","metadata":false},{"id":70641,"structure_id":16129,"section_number":"58.1-511","catch_line":"Definitions","url":"\/58.1-511\/","token":"58.1\/I\/3\/20.1\/58.1-511","metadata":false},{"id":76719,"structure_id":16129,"section_number":"58.1-512","catch_line":"Land preservation tax credits for individuals and corporations","url":"\/58.1-512\/","token":"58.1\/I\/3\/20.1\/58.1-512","metadata":false},{"id":64755,"structure_id":16129,"section_number":"58.1-512.1","catch_line":"Determination of fair market value of donation","url":"\/58.1-512.1\/","token":"58.1\/I\/3\/20.1\/58.1-512.1","metadata":false},{"id":63964,"structure_id":16129,"section_number":"58.1-513","catch_line":"Limitations; transfer of credit; gain or loss from tax credit","url":"\/58.1-513\/","token":"58.1\/I\/3\/20.1\/58.1-513","metadata":false}],"previous_section":{"id":64755,"structure_id":16129,"section_number":"58.1-512.1","catch_line":"Determination of fair market value of donation","url":"\/58.1-512.1\/","token":"58.1\/I\/3\/20.1\/58.1-512.1","metadata":false},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/58.1-513\/","history_text":"

This law was first created in 1999. The record of its establishment is cataloged in chapters 968<\/a> and 983<\/a> of that year\u2019s edition of \u201cActs of Assembly,\u201d the annual state publication listing all changes made to the Code of Virginia in that year. It has been modified 7 times. Those modifications are cataloged by \u201cThe Acts of Assembly,\u201d a state publication, by year and chapter. Those modifications that can be read on the General Assembly\u2019s website will be linked accordingly. Those modifications are as follows: in 2002, chapter 347<\/a>; in 2004, chapter 635<\/a>; in 2005, chapter 255<\/a>; in 2010, chapters 229<\/a> and 248<\/a>; in 2012, chapter 232<\/a>; in 2017, chapters 444<\/a> and 725<\/a>; in 2018, chapter 560<\/a>.<\/p>","references":[{"id":76719,"section_number":"58.1-512","catch_line":"Land preservation tax credits for individuals and corporations","order_by":null,"url":"\/58.1-512\/"}],"refers_to":[{"id":82892,"section_number":"58.1-1800","catch_line":"Local treasurer to receive state taxes; list of delinquent taxes","order_by":null,"url":"\/58.1-1800\/"},{"id":81784,"section_number":"58.1-322.02","catch_line":"Virginia taxable income; subtractions","order_by":null,"url":"\/58.1-322.02\/"},{"id":68940,"section_number":"58.1-339.2","catch_line":"Historic rehabilitation tax credit","order_by":null,"url":"\/58.1-339.2\/"},{"id":56970,"section_number":"58.1-402","catch_line":"Virginia taxable income","order_by":null,"url":"\/58.1-402\/"},{"id":71204,"section_number":"58.1-486.2","catch_line":"Withholding tax on Virginia source income of nonresident owners","order_by":null,"url":"\/58.1-486.2\/"},{"id":63124,"section_number":"64.2-200","catch_line":"Course of descents generally; right of Commonwealth if no other heir","order_by":null,"url":"\/64.2-200\/"}],"permalink":{"id":254069,"object_type":"law","relational_id":63964,"identifier":"58.1-513","token":"58.1\/I\/3\/20.1\/58.1-513","url":"\/58.1-513\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/58.1-513\/","token":"58.1\/I\/3\/20.1\/58.1-513","dublin_core":{"Title":"Limitations; transfer of credit; gain or loss from tax credit","Type":"Text","Format":"text\/html","Identifier":"\u00a7 58.1-513","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

A.<\/span> Any taxpayer<\/span> claiming a tax credit under this article shall not claim a credit under any similar Virginia law<\/span> for costs related to the same project. To the extent a credit is taken in accordance with this article, no subtraction allowed for the gain on the sale of (i) land dedicated to open-space use or (ii) an easement dedicated to open-space use under subdivision 14 of § 58.1-322.02<\/a> shall be allowed for three years following the year in which the credit is taken. Any building which serves as the basis, in whole or in part, of a tax credit under this article shall not serve as the basis of the tax credit allowed under § 58.1-339.2<\/a> for a period of five years following the donation on which the credit is based; and any building which serves as the basis for the tax credit allowed under § 58.1-339.2<\/a> shall not serve as the basis, in whole or in part, for a tax credit under this article for a period of five years following the completion of the rehabilitation project on which the credit is based. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

B.<\/span> Any tax credits that arise under this article from the donation of land or an interest in land made by a pass-through tax entity such as a trust<\/span>, estate<\/span>, partnership, limited liability company or partnership, limited partnership, subchapter S corporation<\/span> or other fiduciary shall be used either by such entity if it is the taxpayer<\/span> on behalf of such entity or by the member, manager, partner, shareholder or beneficiary, as the case may be, in proportion to their interest in such entity in the event that income, deductions and tax liability pass through such entity to such member, manager, partner, shareholder or beneficiary or as set forth in the agreement of said entity. Such tax credits shall not be claimed by both the entity and the member, manager, partner, shareholder or beneficiary for the same donation. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

C.<\/span> 1. Any taxpayer<\/span> holding a credit under this article may transfer unused but otherwise allowable credit for use by another taxpayer<\/span> on Virginia income tax returns. A taxpayer<\/span> who transfers any amount of credit under this article shall file a notification of such transfer to the Department<\/span> in accordance with procedures and forms prescribed by the Tax Commissioner<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> A fee of two percent of the value of the donated interest shall be imposed upon any transfer arising from the sale by any taxpayer<\/span> of credits under this article and upon the distribution of a portion of credits under this article to a member, manager, partner, shareholder or beneficiary pursuant to subsection B. The two percent fee shall not apply to a distribution of credits to a nonresident owner of a pass-through entity when such credits are applied by the pass-through entity to the withholding tax pursuant to subdivision B 2 of § 58.1-486.2<\/a>. Revenues generated by such fees first shall be used by the Department<\/span> of Taxation and the Department<\/span> of Conservation and Recreation for their costs in implementing this article but in no event shall such amount exceed 50 percent of the total revenue generated by the fee on an annual basis. The remainder of such revenues shall be transferred to the Virginia Land Conservation Fund for distribution to the public or private conservation agencies or organizations, excluding federal governmental entities, that are responsible for enforcing the conservation and preservation purposes of the donated interests. Distribution of such revenues shall be made annually by the Virginia Land Conservation Foundation proportionally based on a three-year average of the number of donated interests accepted by the public or private conservation agencies or organizations, excluding federal governmental entities, during the immediately preceding three-year period. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

3.<\/span> If the individual<\/span> taxpayer<\/span> who originally earned the tax credit holds unused credit under this article, he may provide through a will, bequest, or other instrument of transfer that, upon his death, his unused credit shall be transferred to a designated beneficiary. If such taxpayer<\/span> dies without a will, his unused credit shall be transferred to the next person who is eligible to receive according to the rules of intestate succession as described in § 64.2-200<\/a>; however, if two or more persons are eligible to receive according to such rules, the administrator of the taxpayer<\/span>’s estate<\/span> shall choose one such person to whom to transfer such taxpayer<\/span>’s unused credit. The two percent fee described in subdivision 2 shall not apply to a transfer of unused credits pursuant to this subdivision. The carryover period for such transferred credits shall not be extended; instead, such credits shall be subject to the original carryover period as determined pursuant to subdivision C 1 of § 58.1-512<\/a>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

D.<\/span> To the extent included in and not otherwise subtracted from federal adjusted gross income pursuant to § 58.1-322.02<\/a> or federal taxable income pursuant to § 58.1-402<\/a>, there shall be subtracted any amount of gain or income recognized by a taxpayer<\/span> on the application of a tax credit under this article against a Virginia income tax liability. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

E.<\/span> The transfer of the credit and its application against a tax liability shall not create gain or loss for the transferor or the transferee of such credit. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

F.<\/span> A pass-through tax entity, such as a partnership, limited liability company or Subchapter S corporation<\/span>, may appoint a tax matters representative, who shall be a general partner, member\/manager or shareholder, and register that representative with the Tax Commissioner<\/span>. The Tax Commissioner<\/span> shall be entitled to deal with the tax matters representative as representative of the taxpayers<\/span> to whom credits have been allocated or transferred by the entity under this article with respect to those credits. In the event a pass-through tax entity allocates or transfers tax credits arising under this article to its partners, members or shareholders and the allocated or transferred credits shall be disallowed, in whole or in part, such that an assessment of additional tax against a taxpayer<\/span> shall be made, the Tax Commissioner<\/span> shall first make written demand for payment of any additional tax, together with interest and penalties, from the tax matters representative. In the event such payment demand is not satisfied, the Tax Commissioner<\/span> shall proceed to collection against the taxpayers<\/span> in accordance with the provisions of Chapter 18 (§ 58.1-1800<\/a> et seq.). <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nLIMITATIONS; TRANSFER OF CREDIT; GAIN OR LOSS FROM TAX CREDIT (\u00a7 58.1-513)\n\nA. Any taxpayer claiming a tax credit under this article shall not claim a\ncredit under any similar Virginia law for costs related to the same project. To\nthe extent a credit is taken in accordance with this article, no subtraction\nallowed for the gain on the sale of (i) land dedicated to open-space use or (ii)\nan easement dedicated to open-space use under subdivision 14 of §\n58.1-322.02 shall be allowed for three years following the year in which the\ncredit is taken. Any building which serves as the basis, in whole or in part, of\na tax credit under this article shall not serve as the basis of the tax credit\nallowed under § 58.1-339.2 for a period of five years following the\ndonation on which the credit is based; and any building which serves as the\nbasis for the tax credit allowed under § 58.1-339.2 shall not serve as the\nbasis, in whole or in part, for a tax credit under this article for a period of\nfive years following the completion of the rehabilitation project on which the\ncredit is based.\n\nB. Any tax credits that arise under this article from the donation of land or an\ninterest in land made by a pass-through tax entity such as a trust, estate,\npartnership, limited liability company or partnership, limited partnership,\nsubchapter S corporation or other fiduciary shall be used either by such entity\nif it is the taxpayer on behalf of such entity or by the member, manager,\npartner, shareholder or beneficiary, as the case may be, in proportion to their\ninterest in such entity in the event that income, deductions and tax liability\npass through such entity to such member, manager, partner, shareholder or\nbeneficiary or as set forth in the agreement of said entity. Such tax credits\nshall not be claimed by both the entity and the member, manager, partner,\nshareholder or beneficiary for the same donation.\n\nC. 1. Any taxpayer holding a credit under this article may transfer unused but\notherwise allowable credit for use by another taxpayer on Virginia income tax\nreturns. A taxpayer who transfers any amount of credit under this article shall\nfile a notification of such transfer to the Department in accordance with\nprocedures and forms prescribed by the Tax Commissioner.\n\n 2. A fee of two percent of the value of the donated interest shall be imposed\n upon any transfer arising from the sale by any taxpayer of credits under this\n article and upon the distribution of a portion of credits under this article\n to a member, manager, partner, shareholder or beneficiary pursuant to\n subsection B. The two percent fee shall not apply to a distribution of credits\n to a nonresident owner of a pass-through entity when such credits are applied\n by the pass-through entity to the withholding tax pursuant to subdivision B 2\n of § 58.1-486.2. Revenues generated by such fees first shall be used by\n the Department of Taxation and the Department of Conservation and Recreation\n for their costs in implementing this article but in no event shall such amount\n exceed 50 percent of the total revenue generated by the fee on an annual\n basis. The remainder of such revenues shall be transferred to the Virginia\n Land Conservation Fund for distribution to the public or private conservation\n agencies or organizations, excluding federal governmental entities, that are\n responsible for enforcing the conservation and preservation purposes of the\n donated interests. Distribution of such revenues shall be made annually by the\n Virginia Land Conservation Foundation proportionally based on a three-year\n average of the number of donated interests accepted by the public or private\n conservation agencies or organizations, excluding federal governmental\n entities, during the immediately preceding three-year period.\n\n 3. If the individual taxpayer who originally earned the tax credit holds\n unused credit under this article, he may provide through a will, bequest, or\n other instrument of transfer that, upon his death, his unused credit shall be\n transferred to a designated beneficiary. If such taxpayer dies without a will,\n his unused credit shall be transferred to the next person who is eligible to\n receive according to the rules of intestate succession as described in §\n 64.2-200; however, if two or more persons are eligible to receive according to\n such rules, the administrator of the taxpayer’s estate shall choose one\n such person to whom to transfer such taxpayer’s unused credit. The two\n percent fee described in subdivision 2 shall not apply to a transfer of unused\n credits pursuant to this subdivision. The carryover period for such\n transferred credits shall not be extended; instead, such credits shall be\n subject to the original carryover period as determined pursuant to subdivision\n C 1 of § 58.1-512.\n\nD. To the extent included in and not otherwise subtracted from federal adjusted\ngross income pursuant to § 58.1-322.02 or federal taxable income pursuant\nto § 58.1-402, there shall be subtracted any amount of gain or income\nrecognized by a taxpayer on the application of a tax credit under this article\nagainst a Virginia income tax liability.\n\nE. The transfer of the credit and its application against a tax liability shall\nnot create gain or loss for the transferor or the transferee of such credit.\n\nF. A pass-through tax entity, such as a partnership, limited liability company\nor Subchapter S corporation, may appoint a tax matters representative, who shall\nbe a general partner, member\/manager or shareholder, and register that\nrepresentative with the Tax Commissioner. The Tax Commissioner shall be entitled\nto deal with the tax matters representative as representative of the taxpayers\nto whom credits have been allocated or transferred by the entity under this\narticle with respect to those credits. In the event a pass-through tax entity\nallocates or transfers tax credits arising under this article to its partners,\nmembers or shareholders and the allocated or transferred credits shall be\ndisallowed, in whole or in part, such that an assessment of additional tax\nagainst a taxpayer shall be made, the Tax Commissioner shall first make written\ndemand for payment of any additional tax, together with interest and penalties,\nfrom the tax matters representative. In the event such payment demand is not\nsatisfied, the Tax Commissioner shall proceed to collection against the\ntaxpayers in accordance with the provisions of Chapter 18 (§ 58.1-1800 et\nseq.).\n\nHISTORY: 1999, cc. 968, 983; 2002, c. 347; 2004, c. 635; 2005, c. 255; 2006, Sp.\nSess. I, cc. 4, 5; 2010, cc. 229, 248; 2012, c. 232; 2017, cc. 444, 725; 2018,\nc. 560.","edition":{"id":1,"name":"2025","slug":"2025","date_created":"2026-06-21 22:39:22","date_modified":"2026-06-21 22:39:22","current":1,"order_by":1,"last_import":null}}