JMRPWG agenda 102898 - Laserfiche WebLink

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Timing of Acquisition . In most transactions, a land trust will take full ownership of the property or conservation easements as soon as the terms are worked out and the appropriate documents signed . However, some landowners may work out agreements where the trust takes ownership at some future date . A remainder interest is where a landowner gives his or her property to the land trust but reserves the right to live on or use the property for his or her lifetime; e . g. , a "life estate " . A landowner can also leave property - land, an easement or other assets - to the land trust in his or her will . Donation by bequest can significantly reduce the estate tax for the donor ' s heirs by removing the value of the donation from the taxable estate . Tax Benefits of Land Conservation Donations of land or interests in land such as conservation easements may qualify donors for significant tax benefits . In such cases, the land trust ' s representatives need to be knowledgeable about tax benefits so they can discuss them with potential donors . However, they must be careful not to give specific legal or financial advice . It is the responsibilij3 of the landowner with his/her attorney, accountant or other advisors to determine whether a particular donation qualifies for a tax deduction and what the value of the deduction maybe . Income Tax Benefits . A charitable gift of land is generally deductible in computing the donor' s federal income tax . The general rule is that for gifts of apprecia`ed rI apz may , the dortoi can deduct the fair market value of the donated property, up to 30 percent of the donor' s adjusted gross income. Any remaining value can be carried forward and deducted, subject to the same 30 percent limitation, for up to five succeeding tax years . If the value of the contribution is reduced to the property' s basis (e . g . , the price the landowner paid for it), the donor may deduct the value of the gift up to 50 percent of adjusted gross income per year for five years . In terms of state income taxes, individuals and corporations are eligible for an income tax credit for a qualified donation of interest in real property located in North Carolina that is useful for public beach access or use, public access to public waters or trails, fish and wildlife conservation, or other similar land conservation purposes . Another condition of eligibility is the interest in real property must be donated to and accepted by either the State, local government or a body (such as a lams trust) that is organized to receive and administer lands for conservation purposes and is qualified to receive charitable contributions . However, lands required to be dedicated pursuant to local government regulations or ordinance, and dedications made to increase building density levels permitted under such regulations or ordinance are not eligible . The general rule is the donor will be allowed an income tax credit equal to 25 percent of the fair market value of the donated property interesthe credi. T t allowed may not exceed $25 , 000, and any unused portion can be carried forward and deducted for up to five succeeding tax years . Estate Tax Benefits . Estate taxes are paid on the value of an individual ' s assets after death . Changes in tax laws have made it possible to reduce or eliminate the estate tax burden for 12