Building a Legacy Through Land Donation
Donating land to ACT allows landowners to honor the legacy of their land without the financial, management, and liability factors of land ownership. By removing the value of the land from the landowner’s estate, donation also reduces future estate taxes and avoids the capital gains tax that would result from sale of the property. Landowners may also benefit from an income tax deduction equal to the fair market value of the real estate as determined by a qualified appraiser so long as the donation is made to a qualified charitable conservation organization, such as ACT, is granted exclusively for conservation purposes, and is granted in perpetuity. Landowners should work with their financial advisor to report their donation using IRS form 8283.
There are three types of property donations that ACT currently accepts:
Click on the links above or scroll down to learn more about these different types of property donations and how they can benefit ACT’s conservation efforts.
Donation of Real Property
Outright Donation of Land
Through an outright donation of all or part of their property, a landowner grants all rights, title and interest in the property to ACT. Communities in and around North Central Florida are enjoying nature preserves, recreation areas and other open spaces today because of the foresight and generosity of landowners who have donated their land to ACT.
Donation of Conservation Land
A landowner may donate their land with the intention that it be managed and preserved by ACT in perpetuity. ACT can assist the landowner in constructing a land management plan consistent with their particular conservation goals to preserve the scenic, ecological, historical, and/or recreational value of the donated land for generations to come.
Donation of Trade Lands
Trade lands include first and second homes, in-town lots, smaller parcels, commercial buildings, condos, urban properties and other structures lacking conservation value. Landowners may donate such property to ACT, granting express permission for ACT to sell the property and use the proceeds from the sale to fund future conservation projects. In discussing their donation plans with ACT, landowners may specify a particular program to which the proceeds will be directed.
Donation of a Life Estate
Land donation through a reserved life estate or ladybird deed is ideal for landowners who want to ensure that their conservation values are carried on into the future, allowing future generations to benefit from the natural, scenic, cultural, and recreational resources provided by their land. Land donation may also entitle landowners to an income tax deduction.
Using a reserved life estate, a landowner may donate a future interest in their land to ACT while retaining present possession. After discussing and documenting their intent in conjunction with ACT, a landowner may execute a standard deed conveying their land, in part or in its entirety, to ACT with a clause reserving a life estate in the property for themselves or others. By reserving a life estate, the landowner retains an exclusive present interest in their property for the remainder of their life or until relinquishing the life estate.
The landowner is free to live on and use the land, and is responsible for taxes, insurance, and maintenance of the land for the duration of the life estate. Because the landowner has relinquished their future interest to ACT, they have given up sticks in the bundle representing the right to sell, mortgage, convey, gift, or otherwise terminate the remainder interest without ACT’s consent. ACT’s interest in the property becomes vested upon the death of the life tenant or at the time the life estate is relinquished.
A ladybird deed, also known as an enhanced life estate, is not a deed in and of itself. Rather, it is a method of transferring real property by deed. This method of donation is similar to a reserved life estate in that a landowner executes a deed conveying all or part of their property to ACT, reserving a life estate for themselves. Unlike a reserved life estate, a landowner who has utilized a ladybird deed retains the right to gift, sell, mortgage, or otherwise profit from the property without the consent of ACT and maintains the right to revoke the donation.
Before executing the deed of conveyance, a landowner should discuss their wishes regarding the future management of their land with ACT. A gift agreement between the landowner and ACT will record the landowner’s wishes and ensure the property is managed in a way to meet the landowner’s long term expectations for their property.
For information regarding the requirements of qualification for a charitable income tax deduction, please refer to Internal Revenue Code §170(h), as interpreted by Treasury Regulation §1.170A-14 and communicate with your personal financial and legal advisors.
Photos by Alison Blakeslee, Kim Davidson, and Warren Nielsen.
Donation of Tangible Personal Property
Photo by Thomas Niemi.
Donations of tangible personal property, including vehicles, jewelry, artwork, collectibles, and other items of value also benefit ACT. Proceeds from the sale of such items help fund ACT’s conservation programs. The full value of such items may be deducted from taxable income, and allows donors to avoid capital gains taxes that would otherwise result from selling the items.
Banner image: Great horned owl by Kim Davidson.
