Preserve Your Land
Perhaps no asset bears as heavily on one’s heart, wallet, or legacy as land. Sycamore Land Trust helps landowners ensure that their land will be managed according to their wishes long after they’re gone. We are always moved by the passion and generosity of landowners who choose to protect their land forever with Sycamore land Trust.
How Sycamore acquires land
You can protect your land through an outright donation or bargain sale for Sycamore Land Trust to own and manage it as a permanent nature preserve, or by giving Sycamore a conservation easement to hold on your land. Conservation easements allow donors to place permanent restrictions on the use of their lands while still retaining ownership. The restrictions in a conservation easement remain with the property, no matter who owns it in the future. Land can also be given to Sycamore though a will or a charitable remainder trust.
Land protection priorities
Sycamore protects many different types of land in our 26-county service area in southern Indiana. Each property is evaluated individually after careful consideration of its resources and qualities. We consider whether a property:
● includes important natural habitat for wildlife and plants, or buffers important habitat.
● is in a relatively natural, undisturbed condition.
● is adjacent or close to land already protected by Sycamore.
● is adjacent or close to public land or other permanently protected private land.
● includes or protects a significant river, stream or wetland.
● is large enough that its conservation values will likely remain intact despite possible future changes in adjoining land use.
Sycamore must be selective in its land-saving projects. Monitoring and managing the land under our care forever is a serious commitment that costs significant time and money. Unless we exercise care in our choices, the land trust could become responsible for a property or a conservation easement that serves little public interest, is very costly to manage, or does not fit well with Sycamore’s purposes. A land trust that does not carefully select its projects may open itself to public criticism, credibility problems, budget shortfalls, and even legal issues. All land protection transactions must be approved by Sycamore’s board of directors before completion.
Reminder: Get professional advice
Sycamore Land Trust will be glad to discuss any of the above options with you to help you understand the advantages and disadvantages of each. However, you should seek advice from your attorney, estate planner, accountant, or other professional before making any final decisions. Sycamore wants to help as much as we are able, but we are not allowed to give legal or tax advice.
This is the simplest and safest method of land preservation, and has the greatest potential tax benefit for a donor. Sycamore becomes the full owner of the property and is responsible for its care and protection. Sycamore generally maintains its properties as nature preserves, and makes them available for public enjoyment as long as such use is appropriate for the specific property. Prior to the donation, Sycamore will discuss your desires for your land to be sure we understand and can carry out your intentions. Outright ownership makes protection easier for the land trust compared to a conservation easement, as the land is under the full ownership and control of Sycamore.
Tax benefits: Donations of land are noncash charitable gifts for federal income tax purposes. The value of the land, which is determined by a qualified appraiser, can be deducted at an amount up to 30% of the donor’s adjusted gross income (AGI) in the year of the gift. If the gift value exceeds 30% of the donor’s AGI, the excess can be carried forward and deducted (subject to the 30% limit) in each of the five succeeding tax years.
An outright donation alleviates the donor’s property tax burden, since Sycamore, as the new land owner, becomes responsible for all future taxes. It also reduces the inheritance tax for your heirs, as the land will no longer be part of the estate.
Contribution in a will – This type of outright donation allows you to enjoy owning your land and allows the land trust to protect the land when you no longer can. You do not get a tax deduction using this method, but your heirs may have reduced inheritance taxes because the property will no longer be a part of the estate. It is important to discuss your intentions with Sycamore beforehand, to be sure your intentions for your land can be carried out.
Charitable Remainder Trust – In this mechanism, the donor agrees to give the title to the property to the land trust upon their death. The donor retains the title to the property until that time. The advantage of this technique over a will is that you can take a tax deduction for the contribution. The deduction will be less than an outright contribution, because the IRS deducts the value you receive from owning the property for the rest of your life. This is determined through statistical tables that depend on your age.
Just as you can sell the mineral rights to your property while maintaining ownership, you can sign a contract with the land trust that limits activities on the land now and in the future, yet maintain title to the land itself. A conservation easement is a set of permanent restrictions on the use of a property, which are agreed upon by the donor and Sycamore and recorded in a legal document. Sycamore then has the responsibility to monitor and enforce the restrictions, which are permanent and “run with the land.” The donor keeps the title to the property and may sell or pass it on in a will. However, all future owners will receive the property with the restrictions intact. Conservation easements can be tailored to the property and wishes of the donor to cover only certain activities or areas.
A conservation easement donation requires more work by the donor and the land trust to develop the exact restrictions required. It is important to remember that the restrictions will be permanent and cannot be undone, even by the original donor, after the easement is granted. A conservation easement is also more effort for the land trust in the long run, as it must establish a relationship with each new owner and educate them as to the restrictions on the property. Future landowners may not be as conservation-minded as the original donor, so Sycamore must be prepared to enforce the easement through legal means if necessary. With a conservation easement, Sycamore only has the right to monitor and enforce the easement’s restrictions. The landowner remains responsible for all aspects of owning the property, including managing the land and paying property taxes.
Tax benefits: Qualified conservation easement donations may also be treated as noncash charitable gifts for federal income tax purposes. To qualify, a conservation easement must meet certain Internal Revenue Code and Treasury Department requirements. These include that a conservation easement must be perpetual and granted exclusively for certain conservation purposes specified in the code. The donation value is determined by a qualified appraiser, who looks at the effect the easement has on the land’s value. The reduction in the land’s value by the easement’s restrictions, if any, is the amount of the gift. The deduction is subject to the same 30% rule described above for land donations.
The landowner remains responsible for property taxes on the property under easement. Indiana state law requires that the county assessor take a conservation easement into account when determining assessed value; however, there is often little effect on assessed value because land is assessed, for property tax purposes, based on its current use. Undeveloped land is often assessed at the lower agricultural rate, even if it is woods or other natural land. If an easement does not restrict the current assessed use, it will not affect property taxes. Note that the assessed value (based on current use) for property taxes is often very different than the total fair market value, which is based on “highest and best use” (often development). The value of the gift for income tax purposes is based on the easement’s effect on fair market value, not assessed value.
A conservation easement may also reduce the inheritance tax that heirs will have to pay upon inheriting the property. Often the inheritance tax forces heirs to sell some or all of the land to pay the taxes. A conservation easement can significantly reduce the appraised fair market value of the property and make it possible for the heirs to maintain ownership.