Your farm represents a unique labor of love and vision. We can help you make sure it stands the test of time. There are many mechanism by which you can ensure that your property will stay in agriculture forever. You can consider the following:
A conservation easement is a legal agreement between a landowner and a land trust or government agency that permanently limits uses of the land to protect its conservation values. It allows you to continue to own and use your land and to sell it or pass it on to heirs. You can choose to either sell a conservation easement or donate a conservation easement.Learn About Conservation Easements
Donating land for conservation purposes is truly one of the finest legacies a person can leave to future generations. It may be the best conservation strategy for you if you 1) do not wish to pass the land on to heirs; 2) own property you no longer use; 3) own highly appreciated property; 4) have substantial real estate holdings and wish to reduce estate tax burdens; or 5) would like to be relieved of the responsibility of managing and caring for land.Learn About Giving Land
An outright donation is not the only way to give land. You can continue to live on the land by donating a remainder interest and retaining a reserved life estate. In this arrangement, you donate the property during your lifetime, but continue to live on and use the property. When you die (or sooner if you choose), the land trust gains full title and control over the property. By donating a remainder interest, you can continue to enjoy your land and may be eligible for an income tax deduction when the gift is made. The deduction is based on the fair market value of the donated property less the expected value of the reserved life estate.Learn More About Donating A Remainder Interest in Land
If you want to own and control your land during your lifetime, but assure its protection after your death, you can donate it by will through a bequest. You should make sure the chosen recipient is willing and able to receive the gift.Learn How To Bequest Your Land
If you have land you would like to protect by donating it to a land trust, but need to receive income during your lifetime, you might use a charitable gift annuity. In a charitable gift annuity, you agree to transfer certain property to a charity, and the charity agrees to make regular annuity payments to one or two beneficiaries you specify for life. Your gift of land usually qualifies for a charitable income tax deduction at the time of the gift, based on the value of the land less the expected value of the annuity payments.
Another option for donating property and receiving regular income is a charitable remainder unitrust. You place the land in a trust, first putting a conservation easement on it if it is to be protected. Then the trustee sells the land and invests the net proceeds from the sale. One or more beneficiaries you specify receive payments each year for a fixed term or for life, then the trustee turns the remaining funds in the trust over to the land trust. The gift qualifies for a charitable income tax deduction when the land is put in the trust, based on the value of the land less the expected value of the payments. Charitable gift annuities and charitable remainder unitrusts are most useful for highly appreciated land, the sale of which would incur high capital gains tax.Learn About Charitable Remainder Trusts
Bargain Sale of Land
If you need to realize some immediate income from selling your land, yet would like the property to go to a land trust, a bargain sale might be the answer. In a bargain sale, you sell the land to a land trust for less than its fair market value. This not only makes it more affordable for the land trust, but offers several benefits to you: it provides cash, avoids some capital gains tax, and entitles you to a charitable income tax deduction based on the difference between the land’s fair market value and its sale price.