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Working with the Chelan-Douglas Land Trust can enable a landowner to realize estate planning needs and financial goals, qualify for tax deductions, and help to protect some of our region's most unique and beautiful places. Common transactions include cash donations, conservation easements and bargain sales of land. However, transactions can take other forms as well. While the Land Trust will help a landowner choose a strategy that meets the landowner's conservation, estate planning and financial needs, structuring such transactions can be complicated. We recommend that all donors/sellers obtain independent legal and financial advice.
Donations or Sales of Non Real Estate Assets
Outright cash gifts are the simplest way of gaining tax deductions while supporting the Chelan-Douglas Land Trust. A simple cash contribution of $25 or more entitles you to a year of membership in the Land Trust, and helps us continue to protect our region's unique and valuable natural lands. However, donations of other assets such as securities, closely held stock, life insurance, vehicles, antiques, or other assets such as artwork are also tax deductible and may be more appropriate to your situation. Contact us for more information or make a donation now!
Sales or Donations of Real Estate or Easements
In any prospective transaction involving real estate, the property must be evaluated to determine whether it meets the Chelan-Douglas Land Trust's qualifying criteria. If the property meets the criteria for conservation land, the CDLT and the landowner can discuss the possibility of a conservation easement or a sale or gift of conservation land to the CDLT. For more detailed information about conservation easements or donations/sales of conservation land, click on the buttons at the top of this page.
Real estate that does not meet the qualifying criteria (such as residential homes, vacant lots, or commercial properties) may also be sold or donated to the CDLT. The landowner will receive tax credit for a charitable contribution equal to the value of the donation, and the CDLT can then sell (with development restrictions if appropriate) the property and use the proceeds to further the goals of our organization.
In order to meet IRS regulations, all real estate must be properly appraised. Often, an updated survey will also be required. Transactions may be combinations of donations and sales in order to meet the financial and tax needs of the owner.
Utilizing Tax Deductions
Tax benefits which may result from working with the CDLT to preserve land come in the form of income tax deductions, reductions in estate taxes, avoidance of capital gains taxes, and/or reductions in property taxes.
Income Tax Deductions
The IRS allows income tax deductions for donations to qualified conservation organizations such as the Chelan-Douglas Land Trust. However, such donations must meet IRS criteria. At a minimum, such gifts must be freely given (no quid pro quo), permanent (cannot revert to donor), to a qualified organization, and, if worth more than $5,000 a qualified appraiser must substantiate the value. Federal income tax deductions for easements or donations of land owned for more than one year are limited to 30% of your adjusted gross income per year for a total of six years, or until the value of the donation is used up. For cash gifts or land owned for less than one year, up to 50% of your adjusted gross income can be deducted.
Other Tax Deductions
Estate taxes may be reduced based on the value of charitable donations of land, easements, or other assets during life, by will, or by heirs within nine months after death. Additionally, capital gains taxes may be avoided or reduced by donation or bargain sale of highly appreciated real estate or other assets. Finally, conveyance of property to the CDLT eliminates your liability for property taxes, and an easement transaction that results in a new land classification or lower appraisal may reduce your future property taxes.
The Appraisal Requirement
In order for a landowner to obtain tax benefits, the IRS requires the landowner to have a qualified appraisal done. Appraisals value property based on "highest and best use" (i.e., the amount a developer or speculator would pay). A qualified appraisal includes a description of the property, the method of valuation used to determine the fair market value of the property, information about the appraiser and his or her qualifications, and a description of the fee arrangement between the donor and the appraiser. The appraiser cannot be a person whose relationship to the taxpayer or to the Land Trust would cause a reasonable person to question the independence of the appraiser. If the property owner is claiming an income tax deduction for the donation, a fully completed appraisal summary must be reported to the IRS and attached to the donor's income tax return.
Is All Land Eligible for Land Trust Protection?
No. In order to determine which lands are eligible to be land trust conservation land, the Chelan-Douglas Land Trust evaluates lands based on the following qualifying criteria:
