Charitable Deductions for Qualified Conservation Contributions Conformity

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Published April 28th, 2025

Detected March 17th, 2026

Summary

The California State DOR issued a public service bulletin detailing conformity with federal rules for charitable deductions on qualified conservation contributions for partnerships and pass-through entities. The bulletin specifies a 40 percent accuracy-related penalty for disallowed deductions on returns filed on or after January 1, 2024.

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What changed

The California State Department of Revenue (DOR) has issued a public service bulletin to inform taxpayers about conformity to federal provisions regarding charitable deductions for qualified conservation contributions. This conformity, enacted under SB 167, applies to contributions made on or after January 1, 2024, by partnerships and other pass-through entities. Notably, Section 29 of SB 167 imposes a 40 percent accuracy-related penalty on disallowed qualified conservation contribution deductions for returns filed on or after January 1, 2024, and extends the statute of limitations for assessments related to abusive tax avoidance transactions.

Regulated entities, particularly partnerships and pass-through entities involved in conservation contributions, should review the details of SB 167 to ensure compliance with the modified federal rules. Taxpayers claiming these deductions must be aware of the potential 40 percent accuracy-related penalty for disallowed contributions and the implications of the extended statute of limitations. While no specific compliance deadline is stated beyond the effective dates for contributions and returns, entities should ensure their tax filings accurately reflect these conformity provisions to avoid penalties.

What to do next

Review SB 167 provisions related to qualified conservation contributions
Ensure tax filings for partnerships and pass-through entities comply with federal conformity rules for contributions made on or after January 1, 2024
Assess potential accuracy-related penalties for disallowed deductions

Penalties

40 percent Accuracy Related Penalty on qualified conservation contribution deductions disallowed

Source document (simplified)

Charitable Deductions for Qualified Conservation Contributions - Conformity Public Service bulletin

April 28, 2025

Purpose of Bulletin

To provide the public with details of the changes enacted under SB 167, Sections 21, 22, 29, 30, and 35.

Background

Senate Bill (SB) 167, Sections 21, 22, 29, 30, and 35: Conformity to Provisions Related to Charitable Deductions for Qualified Conservation Contributions

For contributions made on or after January 1, 2024, Sections 21, 22, 30 and 35, under the Personal Income Tax Law and the Corporate Tax Law provide conformity, with modifications, to the federal charitable contribution deduction rules for qualified conservation contributions made by partnerships and other pass-through entities.

For returns filed on or after January 1,2024, Section 29, under the Administration of Franchise and Income Tax Law, provides conformity to federal law by imposing a 40 percent Accuracy Related Penalty on qualified conservation contribution deductions disallowed under these rules. The extended statute of limitations for assessments applicable to abusive tax avoidance transactions applies to deficiency assessments disallowing qualified conservation contribution deductions under these rules.