There can be significant tax benefits for donating your land, donating a conservation restriction, or selling at a price that is below market value to the RLF. Many factors determine the type and amount of tax benefits you can qualify for; thus, LLCT and RLF recommend that all landowners consult with an experienced attorney or qualified tax advisor before conserving your land.
Conservation Restrictions
Under the Federal Conservation Tax Deduction benefit, donation of a CR may qualify as a charitable tax deduction on a donor’s federal income tax return based on the change in value of the property before and after the CR is implemented. Federal legislation allows deductions for a qualified conservation contribution to be up to 50 percent of Adjusted Gross Income (100 percent for qualifying ranchers and farmers), and carried-forward for a period of 15 years. CRs may also result in a reduction in property and estate tax burdens.
Deeded Land
Donating land outright to LLCT and RLF may qualify as a charitable tax deduction on a donor’s federal income tax return and may even be deductible under the special rules for a qualified conservation contribution. It also eliminates the donor’s future property taxes and removes the value of the property from the donor’s estate, thus potentially reducing estate taxes. The donor can also avoid capital gains taxes associated with selling highly appreciated property. Finally, deeding your land may help avoid Chapter 61 rollback taxes where applicable.