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- Click here to download Voluntary Conservation Agreements: An Introduction for North Carolina Land Owners. This booklet, produced by Conservation Trust for North Carolina on behalf of North Carolina's land trusts, provides an excellent explanation for conservation easements in North Carolina.
- Read about the tax incentives involved in conserving your land
To talk with CMLC about options for protecting your land, contact Tom Fanslow, CMLC Land Protection Director, at 828-697-5777.
A decision to conserve land is a personal one.
It involves the landowner's financial and tax circumstances, the land resource itself, and most importantly, the owner's vision for the future of that land. Because every situation is unique, Carolina Mountain Land Conservancy (CMLC) offers several different options for conserving productive and scenic lands that give western North Carolina and its communities their rural character .
For landowners who share the goals of CMLC, the options described here may provide means to achieve a personal dream: that of forever protecting an important part of the landscape. Some of these conservation techniques involve project costs and long-term stewardship costs. Management of these costs are covered varies based on individual project circumstances.
- Donation of a conservation easement
- Donation of land
- Donation of a remainder interest
- Bequest and living trust
- Purchase of a conservation easement
- Bargain-purchase of easements and land
- Purchase of land
- Right of first refusal or option
The conservation easement is the most widely used land protection tool available to landowners. Donating a conservation easement protects the land permanently, yet keeps it in private ownership. Easements are flexible and easily tailored to meet a landowner's needs. As part of giving a conservation easement, the landowner, working with CMLC, identifies specific permitted uses of the property. These normally include agriculture, forestry, recreation, and other open space uses. The easement limits or prohibits certain activities, including industrial, commercial, and residential development.
Conservation easements are designed to conserve forever the important resource values of each property. An easement may cover portions of a property or the entire parcel. It is legally binding on all future owners and will be monitored and enforced by CMLC's Stewardship staff.
For conservation easement donations made through the end of 2011, the law allows the donor to claim an income tax deduction equal to the value of the gift. The donor can claim this deduction up to 50% of the donor’s adjusted gross income. If the donor is unable to claim the entire deduction on that year’s tax return, then the donor can carry forward the unused portion of the deduction to claim on future tax returns up to a limit of 15 years. Donors who earn at least half of their income from farming or ranching may take a deduction equal to 100% of their adjusted gross income, and also enjoy a 15-year carry-forward period. After 2011, all taxpayers will be subject to a 30% cap on the amount of the deduction that may be claimed, and the carry-forward period shrinks from 15 years to 5 years.
An outright gift of land for conservation is one of the most generous legacies a landowner can leave for future generations. Throughout North Carolina there are parks, forestlands, and scenic open spaces that the public enjoys because of the long-term vision of conservation-minded landowners.
Donating land can have many benefits for a landowner. It can be a relatively simple and quick transaction that:
- assures the permanent protection of a family property;
- provides a charitable income tax deduction for the full fair market value of the land;
- avoids capital gains taxes on appreciated land, which otherwise would be due at the time of a sale;
- removes the property from the donor's taxable estate;
- releases the donor from the expense and the responsibility of managing the land; and
- provides long-term support for CMLC.
In cases where land provides important public benefit, CMLC might convey the gifted property to government agencies to ensure that the public will own and enjoy the property for the long term. CMLC believes that in most cases, however, private owners are the best long-term managers of land. When CMLC receives a gift of conservation land where private ownership is the best outcome, it will place a permanent conservation easement on the property and then sell the land. CMLC will use the proceeds to protect other conservation lands throughout western North Carolina.
A landowner can donate land and continue to live on it during his or her lifetime. This is known as a gift of a remainder interest, or a gift of land with a reserved life estate.
With a gift of a remainder interest, the donors and their beneficiaries reserve the right to continue to live on and use the property during their lifetimes. At the end of the specified life interests, full title and control of the property automatically transfers to CMLC. In most cases CMLC resells the land subject to a permanent conservation easement. Thus, the final outcome is very similar to that of an outright gift of land.
The donation of a remainder interest offers several advantages:
- the donors continue to use and enjoy the property throughout their lifetimes;
- the property is permanently conserved;
- the donor may be entitled to an income tax deduction when the gift is made, if the property is a personal residence, farm, or land having conservation value; and
- the proceeds from the sale of the property will support CMLC's land conservation program after the life interests conclude.
Many landowners wish to retain maximum flexibility during their lifetimes and choose to carry out their conservation plans through a bequest or a living trust. Landowners can conserve important lands by donating property or donating a conservation easement through their Wills.
A bequest is a provision in the landowner's Will or a codicil (a Will amendment) that instructs the estate's executor to convey land or a conservation easement to CMLC. A living trust can achieve the same results but avoids the probate process.
Both the bequest and the living trust can assure the permanent protection of the land, permit the donor to control the property during his/her lifetime, and may reduce the donor's taxable estate. In either case, the terms of an easement can be developed through discussions between the landowner and CMLC, to achieve the goals of both.
CMLC purchases conservation easements primarily on outstanding properti