information for land owners
Land Donation & Sales
Gifts or outright sales of land to SLT will mean protection for that land in perpetuity. There may also be tax benefits to either action.
A conservation easement protects your land from development forever. Your land will continue to be privately owned, but restrictions are placed on the property that will be permanently upheld by the Stonington Land Trust. Conservation easements can be used to protect fields or woods, animal habitats or views, shoreline or pasture. Conservation easements can also be used to guarantee that the public will have access to a property in perpetuity or restrict access only to the Land Trust for the purpose of periodic inspection.
An easement is structured according to the long-term needs of your family. When you give a conservation easement to the Stonington Land Trust, you continue to own and use the property (and pay the taxes). If you decide to sell the land, you may. In an easement, some of the rights associated with your land are transferred (such as development rights), and the value of the property is reduced. Conservation easements given to the Stonington Land Trust are charitable donations. The Stonington Land Trust may refuse easements on properties, depending on the value, size and location. For ecologically important parcels of land, the Stonington Land Trust, working with other charitable and government entities, may buy a conservation easement from the landowner. The Stonington Land Trust will work with the landowner to determine whether an easement on your land should be sold or donated.
Farmland protection is often preserved through the transfer of delelopment rights, one portion of the bundle of rights of ownership. The farmland is then assessed at a much lower rate for tax purposes. One or more farmstead areas can be excluded from the development restriction, so that individuals farming the land may live on the land.
The Stonington Land Trust can provide you with information regarding conservation easements and connect you with professionals - accountants, lawyers, and qualified appraisers - who can help evaluate these gifts.
Once the conservation easement is finalized, it will be forever attached to the land, regardless of ownership. This perpetual attachment gives you the knowledge that your land will be forever cared for and protected in accordance with your wishes.
Tax Benefits for Landowners
There are a number of ways that land can create tax benefits.
Conservation Easement Tax Benefits
Individual property owners who donate a conservation easement that qualifies with the requirements of Section 170(h) of the Internal Revenue Code and Treasury Regulations, may be able to take a deduction of up to 50% of their adjusted gross income for the year. If the value of one’s donation exceeds 50% of their adjusted gross income, one may carry over the remainder of the donation, at the rate of up to 50% of their adjusted gross income, each subsequent year for up to 15 additional years.
Land donation Tax Benefits
Individual property owners who donate land for conservation, may be able to take a deduction of up to 30% of their adjusted gross income for the year. If the value of one’s donation exceeds 30% of their adjusted gross income, one may carry over the remainder of the donation at the rate of up to 30% of their adjusted gross income, each subsequent year, for up to 5 additional years.
Deductions for gifts of qualifying conservation easements and land are limited to federal income taxes. There is no deduction for Connecticut income tax purposes. In order to obtain a deduction, an individual must obtain an appraisal of the land or conservation easement donated. This appraisal:
- Must be made by a “qualified appraiser”
- Must meet the requirements of the Internal Revenue Code and Treasury Regulations for “qualified appraisals”.
- Must be made no more than 60 days before the donation of the land or conservation easement and no later than the date for filing for donors federal income tax return, including applicable extension periods.
Federal tax rules for donations of property and conservation easements are complex. Therefore, any donor must seek their own tax advice from a tax professional with experience in these areas.
If you are an active farmer and wish to preserve land, there may be additional tax benefits. Please contact us or your tax advisor for more information.
Bargain Sales of Land for Preservation
offer an additional option. When a landowner sells land or an easement on the land at a price less than the appraised value, this is called a bargain sale. The difference between the selling price and the appraised value may be tax deductible. Please contact us or your tax advisor for more information.
How Do I STart?
Please contact the Stonington Land Trust for more information.