Donating Land - old two column
An outright donation of land has several benefits. It is a relatively simple transaction. It releases you from the responsibility of managing the land. It provides substantial income tax deductions and estate tax benefits while avoiding any capital gains taxes that would result from selling the property. Most important, if the land is donated because of its conservation value, it will be permanently protected.
Donating land is often especially attractive to landowners-
* whose land has significant conservation values and who do not have heirs, or whose heirs cannot or will not protect it;
* who own property that they no longer use;
* who own highly appreciated property the sale of which would result in large capital gains taxes;
* or who would like to be relieved of the responsibility of managing and caring for land that they otherwise treasure.
Donation & Charitable Deduction vs. Real Estate Sale & Capital Gains Tax
Donating land is a very generous act. But, especially if the land has appreciated a great deal since you acquired it, it may not be as large a financial sacrifice as one would expect.
If you donate your land to a charitable organization or government agency, you can claim an income tax deduction equal to the land's current fair market value. Generally, for a gift of long-term capital-gain property - which includes most gifts of appreciated land - the amount you can deduct in one year is 30% of your adjusted gross income. If the value of your gift exceeds 30%, you can carry forward the excess for up to 5 additional years, applied each year up to the 30% limit.
If you sell your land, you will incur capital gains tax on the appreciation. Your profit may be further reduced by a realtor's commission usually 6-10%, and expenses resulting from the time delay in finding a buyer. Donating the land will also remove its value from your estate, reducing future estate taxes. And, of course, you won't have to pay property taxes on it anymore.
* Taken from Conservation Options A Landowner's Guide The Land Trust Alliance, Washington, DC. 1993.
Please find the information below helpful if you are considering preserving your land through a donation to the Cumberland Land Trust.
Donating Land
Land donated to a land trust for conservation is truly one of the finest legacies a person can leave to future generations. Communities across the country are enjoying nature preserves, recreation areas, and other open space today because of the foresight and generosity of landowners who have made gifts of their land.