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Donating or selling land to a charitable organization is a generous act creating a legacy for your family and the community. If the land has appreciated a great deal since you acquired it, an outright donation or below market (“bargain sale” for less than market value) may not be as big a financial sacrifice as you might expect. In fact, both bargain sales and donations can have substantial financial benefits.
Obviously, a sale at market value realizes full price for the owner. However, the seller is typically liable for income taxes and capital gains taxes. In contrast, an outright donation or bargain sale of property to CDLT can yield substantial income tax deductions and estate tax benefits for the donor or seller, while contributing to your environmental legacy. Below market sales of land are attractive to many people because they combine the income-producing benefits of a sale with the tax-reducing benefits of a donation. Moreover, non-profit conservation organizations like the Chelan-Douglas Land Trust (CDLT) have to secure grant funding for most purchases, and grants require matching funds from other sources. The value of the bargain sale donation often satisfies the match requirement.
We recommend that all landowners contemplating a gift or below market sale of property consult with independent legal and financial advisors.
Donating land for conservation purposes may be the best conservation strategy in several circumstances, for example: if you do not wish to pass the land on to heirs, own property you no longer use, own highly appreciated property the sale of which would result in large capital gains taxes, wish to reduce estate tax, income tax, or property tax burdens, or would like to support the Land Trust by gifting property for resale by the Land trust to a conservation buyer. Donations and below market sales may be done during your lifetime, or planned for in a Last Will and Testament to take place after death.
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