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Tax Implications | Donating a Remainder Interest | Donating Land by Will | Donating a Property to Generate Conservation Funds | Donating Undivided Interests | Donations that Establish a Life Income

Tax Implications

By donating land, you can make a generous gift without necessarily making a large financial sacrifice. If your land has appreciated greatly since you acquired it, you could incur a high capital gains tax. Your profit might be further reduced by a realtor’s commission.

Donating land to a charitable organization or government agency entitles you to claim an income tax deduction equal to the land’s current fair market value (within tax code limitations, as noted in chapter 6). A land donation eliminates your property tax burden and removes the property value from your estate, reducing the risk that high estate taxes could force a sale by your heirs.

Before making their gift, donors should discuss with the recipient organization how their land will be managed. Most land trusts will do their best to accommodate the donor’s wishes (while retaining the right to make management decisions as circumstances change). To provide an extra guarantee that the land will be cared for according to your wishes, you can donate a conservation easement on the property to one organization, then donate the land to another (both gifts are considered deductible).

Before accepting any donated easement or property, a land trust must consider the long-term ownership and management costs and may ask for a stewardship contribution. The property may have fields to be mown, trails to be built, or other ongoing maintenance and insurance burdens. Many tax-exempt conservation organizations choose to make annual payments to the town in lieu of taxes, which adds to management costs.

Beach Plum Farm

A generous land donation secured the future of Ogunquit’s Beach Plum Farm, a rare green oasis in the midst of spreading development. photo: © Bill Silliker, Jr.

Donating Land

Like many beach towns, Ogunquit has changed markedly over the last half-century—becoming part of a bustling, sprawling commercial zone that stretches from Kittery to Portland. Joseph Littlefield, a long-time Ogunquit resident, recalls that village life today is “nothing like it was. When I was a kid, I’d go down to the beach every day, dig clams from the river, and steam them for dinner. You had the beach to yourself back then.”

Littlefield inherited a prominent farm in Ogunquit village that his uncle, Roby Littlefield, had farmed for more than 60 years. The 22-acre property, Beach Plum Farm, offers the last remaining ocean vistas from Route One in town. “My uncle wanted to keep the land as it is,” Joseph says. A well respected civic leader, Roby Littlefield had served as a state legislator and publisher of the town’s newspaper. He also had led a community effort to purchase shorefront land in 1923, creating Ogunquit Public Beach.

When Roby Littlefield passed on in 1988, just shy of his hundredth birthday, his nephew decided to preserve Beach Plum Farm as a treasured community resource. He donated the property to Great Works Regional Land Trust (GWRLT). The farm offers a quiet haven for people and wildlife: a local farmer still works its fields and many area families enjoy the property’s community gardens. “By preserving an important piece of the town’s past,” GWRLT’s Tin Smith says, “the Littlefields made a meaningful gift to the community’s future.”