Bamacamp gave an excellent description of the way it works. The IRS has traditionally been very negative towards these easements, and if you are going to do it, you had better have an appraiser and attorney who are VERY familiar with the process. Sirote and Permutt, a Birminghamlaw firm, has a national reputation for successfully defending these. There has been considerably abuse of the system in recent years, with groups selling "shares", and using inflated/deflated appraisals and the IRS is absolutely clamping down on that (including criminal charges). I've seen a few appraisals involving easements, and it's my impression that there is a lot of ignorance about both the process and the values, even in the appraisal profession.