The donation of a piece of land for conservation purposes can have lasting benefit of sometimes far reaching proportions for preserving open space, protecting habitat, ensuring the survival of endangered or threatened species, preserving historic values, assuring species diversity, setting aside particularly special or beautiful viewscapes or protecting watersheds, lakes, ponds, streams and wetlands. The donation of land or a conservation easement can also make economic sense, often reducing estate tax and/or capital gains taxes on appreciated land.
Three of the most common strategies to protect your land are an outright donation of land, a bargain sale and a donation of a conservation easement while still retaining ownership.
The donation of a piece of land for conservation purposes is one of the greatest legacies a person can leave to future generations. It can result in a significant income tax deduction and substantial estate tax benefits. It may eliminate costly capital gains taxes associated with the sale of the land, and it may even be structured in such a way as to allow you to continue to live on the property.
Bargain Sale of Land
This donation option allows you to realize some of the immediate income from the sale of your land while making it possible for a not-for-profit, like the Mianus River Gorge to purchase it. You sell your land for less than the fair market value and in the process avoid some capital gains tax and get an income tax deduction.
A conservation easement is a flexible tool by which you can protect certain natural, historic or scenic features of your property while still maintaining ownership of your property. It is a legal agreement between you and a land organization, like the Gorge, that restricts what you can and can’t do with your property. The degree of restriction is up to you and the holding organization. Since you still own it, you can continue to use the land, sell it or pass it on to heirs. Once established, the easement runs with the land to protect it in perpetuity.
If the easement meets the Federal tax code requirements, it can result in a potentially significant income tax deduction, a reduction in estate taxes and a possible property tax reduction as well. The easement can be donated during your life or by will and can help substantially reduce estate taxes for your heirs.
The Gorge works with landowners throughout the Mianus Watershed to help them preserve vital resources. If you would like more information about land and conservation easement donations, please contact Rod Christie at (914) 234-3455.