Donating Land

Land donated to a land trust such as the Fort Thomas Forest Conservancy (FTFC) for conservation is truly one of the finest legacies a person can leave to future generations. Communities across the country are enjoying nature preserves, recreation areas, and other open space today because of the foresight and generosity of landowners who have made gifts of their land.

An outright donation of land has several benefits. It is a relatively simple transaction. It releases you from the responsibility of managing the land. It provides substantial income tax deductions and estate tax benefits (while avoiding any capital gains taxes that would result from selling the property). Most important, if the land is donated because of its conservation value, it can be permanently protected.

Donating land is a very generous act. But, especially if the land has appreciated a great deal since you acquired it, it may not be as large a financial sacrifice as one would expect. If you donate your land to the FTFC, a charitable organization, you can claim an income tax deduction equal to the land’s current fair market value. If you sell the land, you may incur capital gains tax on the appreciation. Your profit may be further reduced by a realtor’s commission and expenses resulting from the time delay in finding a buyer.

Donating land will also remove its value from your estate, reducing future estate taxes. And, of course, you won’t have to pay property taxes on it anymore.

Most donors of land understandably wish to have a say in how the land trust will use or manage the land in the future. One way to do this is to state your wishes in a letter. FTFC would do our best to accommodate your desires but will retain the flexibility to make management decisions as circumstances change.

It is typical for a land trust to request a financial contribution toward future management costs, to enable it to fulfill its perpetual obligation to care for the land. Although this may seem an odd request to make of a donor who has already made a generous gift of property, it demonstrates that the land trust takes seriously its stewardship responsibilities. The FTFC may or may not make such a request depending upon the condition of the land when donated and, in any case, would not make a financial contribution contingent upon its accepting the land donation.