Congratulations! You have decided to protect your farmland. Now what do you do?
The first step is to complete an Agricultural Conservation Easement Application. This provides important information such as the location of the farm, number of acres, legal owners, current uses, etc. and allows the Central Valley Farmland Trust (CVFT) to create a property summary. CVFT staff will evaluate your application using the Easement Selection Guidelines. If the property meets the guidelines a member of the staff will make an appointment with you to see the property.
The decision to protect your land with a conservation easement should not be taken lightly. It will impact (forever) future generation’s use of the land. If the project appears viable after the initial site inspection staff usually requests a meeting with all family members who have a current and or future interest in the property to discuss the collective implications of a conservation easement and how it impacts people and the land.
As a landowner, you have the option of selling an agricultural conservation easement (ACE), selling an ACE at a reduced price (e.g. Bargain Sale) or donating the ACE. If you choose to sell an ACE you can utilize the sales proceeds to accomplish several financial goals. Many landowners choose to retire debt, make improvements on their property or purchase additional land. There are no restrictions on the funds received, regardless of where the funding may have been provided.
If you choose to sell an ACE at a reduced price it may qualify as a donation for IRS purposes. There are certain and specific guidelines to follow to insure there was a true “donation” of a property interest.
By donating all or a portion of the ACE you may generate income, estate and property tax benefits. It is important to know that each situation is unique and each tax payer is unique. We strongly encourage you to seek guidance from a qualified tax advisor.
The decision to donate or sell an ACE is completely voluntary. A comprehensive understanding of the implications is critical in making a decision whether or not to place an ACE on your property. Please contact CVFT to discuss how an ACE may benefit you and ultimately protect the agricultural productivity of your land for future generations.