The gift of land or a conservation restriction to Metacomet Land Trust may qualify as a charitable donation eligible for a federal income tax deduction. The IRS regulations on donations of land or interests in land have recently changed and we urge you to seek up-to-date advice from a qualified tax accountant or attorney.
In addition to the potential federal income tax benefits, the gift of land to a charitable organization reduces the donor’s taxable real estate and lowers the family’s net worth for estate purposes. If the landowner is concerned that heirs will have to pay estate taxes, the gift of conservation land may be an appropriate part of an estate plan.
The recording of a Conservation Restriction on privately owned land usually will reduce the market value of the protected land. However, if the owner lives in a house on the property, the value of the residence and house lot could actually increase due to the desirability of conservation land. Income-producing farm or forest land, even if restricted, will usually have a higher value than land which cannot produce income.
The IRS has new guidelines which all appraisers must follow when evaluating charitable gifts of land or restrictions. Please make sure that your appraiser is aware of the latest IRS standards and rulings.
Cash donations to Metacomet Land Trust are charitable gifts and may also provide a tax deduction subject to IRS limits.
Higher Federal Income Tax Deductions For Gifts or Bargain Sales of Conservation Restrictions
The 2008 Farm Bill renews a powerful tax incentive which has helped conserve a million or more acres of farms, woodland and natural areas across the US. The higher federal income deduction for charitable donations of conservation restrictions is retroactive to the beginning of 2008 and will last through 2009.
The tax incentive was recently featured on Forbes.com, the online version of Forbes Magazine: “Landowners and Charities Farm Tax Break.”
Metacomet Land Trust greatly appreciates the support for this important conservation initiative shown by our own Congressmen Jim McGovern and Richard Neal and Senator John Kerry. The higher charitable tax deduction for gifts of permanent conservation restrictions will help many landowners in our area.
The incentive, which applies to a landowner’s federal income tax, has three benefits:
- The charitable deduction a donor can take for donating a voluntary conservation agreement has been raised from 30% of income in any year to 50%;
- Eligible farm families and farm businesses may deduct up to 100% of annual farm income; and
- The law increases the number of years over which a donor can take the charitable deduction to 16 years.
These new benefits mean that most landowners will be able to receive a charitable deduction off their federal income taxes for years to come.
Metacomet is proud to have partnered with five landowners over the years to protect 160 acres through the donation of Conservation Restrictions. If you would like more information on how to conserve your property, please visit our checklist for landowners and then call our toll-free number, 1-888-298-7284.
All inquiries are handled in strictest confidence.
Since conservation restrictions typically require several months of preparation, please act soon to take advantage of the higher charitable deduction.