How To Protect Your Land

“It’s not about ownership, it’s about protection”

You can protect the qualities of land you love by transferring it to the Conservancy or by granting an easement to the Conservancy to preserve those qualities forever.  Additionally, the entire Cragsmoor community will benefit, because Cragsmoor itself will be preserved and protected.  Even those who don’t live in Cragsmoor will benefit, as your gift will protect Cragsmoor’s beautiful scenic heritage.

Here is how these preservation tools work:

Conservation Easements allow landowners to protect some or all of their property from future development without giving up ownership. You continue to own, live on and use the land. You retain the right to sell it or to pass it on to your heirs.

An easement can be structured to meet your particular wishes, specifying what uses the land may or may not be put to, in perpetuity.  It binds future owners to the terms laid out.  Possible designations include wildlife habitats, camping or recreational space, fishing, hunting or hiking preserves, farming use, maintaining the architectural integrity of existing and future structures, or whatever terms fit your needs and desires. The land remains on the tax rolls, possibly at a reduced assessment, and there is no public access unless so designated.

Donation.  Alternatively, you may wish to donate your property to the Conservancy on the understanding that the property will be forever preserved in a natural state, architecturally appropriate condition, or according to whatever wishes you have outlined. There are several ways to donate land:

Outright Donation: If you have owned your land for over six months, you may donate it to the Conservancy, producing distinct tax advantages:  you receive a Federal income tax deduction of the property’s full fair market value, up to 30 percent of your adjusted gross income for the year of the donation.  And if the value of your donation exceeds this 30% cap, you may carry over the balance for up to five successive years, subject to the same 30% cap for each year.  In addition, New York State allows a similar deduction on your state income tax.

Life Estate. If you want to continue to use your property throughout your life and/or the lives of your immediate family but wish to eventually donate it to the Conservancy, you may choose to keep a “life estate” and receive an immediate deduction for what is called the “remainder interest.”  If you choose this type of donation, you will retain the right to use your property throughout your lifetime, and the Conservancy will acquire outright ownership on your death or the death of your immediate heirs. For income tax purposes, the amount of the deduction is the value of the land less the value of the life estate, determined by actuarial tables published by the Internal Revenue Service, and is otherwise governed by the same tax rules as an outright donation.

Gift by Will.  You may bequeath land to the Cragsmoor Conservancy in your will, insuring that it will be preserved forever as a lasting memorial. Additionally, your bequest may reduce estate and inheritance taxes for your heirs.  Please contact the Conservancy if you wish to include a gift of land in your will.  We will advise you on the language that should be used to insure that your wishes are followed and that you achieve the tax results desired.

An example:
Assume Mr. Gonsalus owns 20 acres of land within the Cragsmoor Fire District, and he does not want it developed. Assume further that he bought the land some years ago for $30,000 and that it is now worth $200,000. If Mr. Gonsalus donates his land to the Cragsmoor Conservancy, the tax consequences are as follows:
a.    For the year of the gift, Mr. Gonsalus is entitled to a charitable deduction of $200,000, the fair market value of the land, up to 30% of his adjusted gross income. If the $200,000 exceeds that 30% for the year in which he donates the land,
he is entitled to carry over any excess to his next five taxable years, until the deduction is entirely used up.
b.    Mr. Gonsalus would avoid any tax on the $170,000 of capital gain that he would have incurred were he to sell the land. He also avoids costs, such as broker’s commissions, associated with selling the land.
c.    Mr. Gonsalus also has the satisfaction of knowing that his land will be protected in perpetuity.


© 2012