Conserving Your Land
As a landowner, you may consider a variety of ways in which you can protect your land. Many conservation methods offer tax advantages, helping to reduce your estate, income and property taxes. There are three common conservation methods to help you ensure the permanent protection of the special features of your property:
Conservation Easements
This is a legal document recorded at the Registry that limits the type and scope of development on your property. Easements allow landowners to help preserve important aspects of their community and contribute to the region’s quality of life. Particularly in areas facing rapid development, easements can complement local zoning by ensuring appropriate growth and protection of sensitive areas.
With this method, you may keep your land held in family ownership. The conservation easement restrictions are upheld by Helping Feet in perpetuity. Helping Feet generally requests a stewardship contribution from the easement donor to stand by your protected properties, upholding the landowner’s wishes in perpetuity.
While the easement is a popular and versatile conservation tool, it may not be the best choice for all landowners. Some lands lack sufficient conservation significance to merit protection with an easement. Other lands, such as those that receive extensive public use, might best be owned and managed by a public agency or private land trust.
With this method, you may keep your land held in family ownership. The conservation easement restrictions are upheld by Helping Feet in perpetuity. Helping Feet generally requests a stewardship contribution from the easement donor to stand by your protected properties, upholding the landowner’s wishes in perpetuity.
While the easement is a popular and versatile conservation tool, it may not be the best choice for all landowners. Some lands lack sufficient conservation significance to merit protection with an easement. Other lands, such as those that receive extensive public use, might best be owned and managed by a public agency or private land trust.
Potential Benefits that Easements Offer You as the Landowner:
– Easements provide permanent protection, applying to all future landowners. Helping Feet or a government agency upholds the restrictions over time.
– You retain title to your property and may continue to live on it, sell it,or pass it on to your heirs, knowing that it always will remain protected.
– Easements can aid in estate planning, reducing estate taxes that could force the sale of family lands. Donated easements also can provide a charitable income tax deduction.
– Easements can reduce your property taxes by eliminating unwanted but highly valuable development potential.
– Easements can minimize family conflicts when your lands pass to the next generation.
– You retain title to your property and may continue to live on it, sell it,or pass it on to your heirs, knowing that it always will remain protected.
– Easements can aid in estate planning, reducing estate taxes that could force the sale of family lands. Donated easements also can provide a charitable income tax deduction.
– Easements can reduce your property taxes by eliminating unwanted but highly valuable development potential.
– Easements can minimize family conflicts when your lands pass to the next generation.
Donations
You may donate your land outright to Helping Feet or donate a conservation easement to us. By making a donation of land or donating a conservation easement, you can make a generous gift while benefiting from income and estate tax deductions.
Donating land may be attractive to landowners who:
– Treasure their property and want to see it preserved for the common good;
– Own property they no longer wish to use;
– Own highly appreciated property, the sale of which would prompt a high capital gains tax;
– Own substantial real estate holdings and wish to reduce property and estate tax burdens;
– Recognize that greater expertise is needed to protect and manage the land; or
– Have no heirs willing or able to protect the land’s conservation values.
– Own property they no longer wish to use;
– Own highly appreciated property, the sale of which would prompt a high capital gains tax;
– Own substantial real estate holdings and wish to reduce property and estate tax burdens;
– Recognize that greater expertise is needed to protect and manage the land; or
– Have no heirs willing or able to protect the land’s conservation values.
Selling Your Land
You may sell your land or sell the development rights to us. Selling land at fair market value to a conservation organization may seem to landowners like an ideal solution, but nonprofit groups rarely can afford such acquisitions. Purchases at fair market value are generally reserved for exceptional parcels that face an imminent threat of inappropriate development.
Many landowners come to realize that a sale at fair market value may not even be desirable. Capital gains taxes and selling costs (such as the realtor’s commission) substantially reduce profits, particularly for landowners in higher tax brackets or for those selling highly appreciated property. Bargain sales typically net less money but can minimize taxes and secure the land’s future.
Many landowners come to realize that a sale at fair market value may not even be desirable. Capital gains taxes and selling costs (such as the realtor’s commission) substantially reduce profits, particularly for landowners in higher tax brackets or for those selling highly appreciated property. Bargain sales typically net less money but can minimize taxes and secure the land’s future.
Bargain Sale
A bargain sale, where property is conveyed at less than its fair market value, increases the chance that a Non Profit like ours or a government agency can purchase it. The landowner and Helping Feet negotiate a mutually agreeable price. While a bargain sale may produce a smaller financial return than a sale at fair market value, the loss can be somewhat offset by tax savings. The difference between the land’s appraised market value and its sale price is considered a tax-deductible charitable donation. For any gift of property over $5,000, the gift’s value must be substantiated by a qualified appraisal to receive a tax deduction.
Installment Sale
In an installment sale, the seller agrees to accept a series of payments over time rather than in one lump sum. Installment sales benefit landowners by spreading income and taxable gains over several years, although special income tax rules apply. Installment sales benefit the purchasing organization by providing additional time to raise the needed funds. A less complicated installment sale can be done by dividing the land and selling parcels in stages until the entire property is transferred. As with gifts of undivided interests, the land trust may want an option agreement to confirm that it can acquire the whole parcel.
Option to Purchase
If a conservation organization like Helping Feet does not have funds for an immediate purchase, a landowner may choose to give or sell an option to buy the property. Under an option, both parties agree on a sale price and the buyers are given a specified amount of time in which to determine whether or not to exercise the option.
The land cannot be sold to other buyers during the option period, giving the conservation group or nonprofit time to raise the necessary purchase funds.
The land cannot be sold to other buyers during the option period, giving the conservation group or nonprofit time to raise the necessary purchase funds.
How a Bargain Sale Affects Federal Income Tax
The tax law treats a bargain sale as being part taxable sale and part charitable donation. The sale is subject to capital gains tax while the charitable donation results in an income tax deduction.