Please consult your attorney and tax advisors about the effect of a gift or easement on your income tax situation.
Most conservation easements are donated by landowners who wish to protect a beloved place. Under certain circumstances, easements are sold at a bargain price or fair market value. Donations and bargain sales that meet IRS requirements can result in federal tax benefits.
A retained life estate is for you if…
- You might want to use your residence to make a gift to the Catoctin Land Trust, but don’t want to move out.
- You are willing to deed your home, cabin, or farm to the Catoctin Land trust if you can continue to life there rent-free.
- You can continue to maintain your home.
- Your home is not subject to a mortgage or other obligations.
- You do not need the funds that would be generated by selling the property.
- You wish to reduce your income and estate taxes.
An attractive option for donating real estate is the retained life estate. This arrangement allows you to give your property to the Catoctin Land Trust while retaining the right to live there for the rest of your life.
You will continue to be responsible for its taxes, structural maintenance, insurance, and upkeep. Catoctin Land Trust has no rights to the property nor, by low, any obligations. We mutually agree up front about what we will do if you no longer wish to live in the house or become physically unable to continue living there.
You will receive a charitable deduction based on the fair market value of your property minus the present value of the life tenancy you have retained. Additionally, any capital improvements, such as a new roof, may give rise to additional deductions.
With a retained life estate, you are able to make a significant gift to Catoctin Land Trust without disturbing your income or your living arrangements.