Land as a legacy for Eastern Colorado

   In Eastern Colorado, land is not only one of our most valuable resources, it is part of our heritage. The land will always be here, but sadly, future generations may not. Over the next 50 years, much of the wealth generated in rural America will transfer to urban areas; people will inevitably follow.
    The Eastern Colorado Community Fund exists to preserve wealth and give back to our region for future generations. The donation of real estate or mineral interests to a fund at the ECCF is one way you can participate in that mission.
    Real estate and mineral interests are great assets to donate to charity because you can avoid capital gains tax, receive a charitable deduction and benefit the causes you care about most. For landowners with much of their wealth tied up in real estate, this may be one of the few ways to leave a charitable legacy.
    Let’s take the example of a 500-acre parcel of farmland, originally purchased for $100,000. The property is now valued at $500,000. If you sell the property and donate the proceeds to charity, you could pay 20 percent or more in combined federal and State capital gains or upwards of $80,000. This would minimize your deduction to $420,000 or less.
    By comparison, you could donate the property to a nonprofit, which can sell it without paying capital gains, and you would receive a tax deduction for its full value.
    In addition to tax benefits, donating real estate allows you and your family members to avoid the complications of selling the property. If the land has a Conservation Reserve Program agreement, it can be transferred to the new purchaser. Depending on the time of year that the purchase is made, a prorated payment may be negotiated.
    A donation of mineral rights works much in the same way — the donor avoids capital gains tax and receives a deduction for the value of the interests.

The full article is available in our e-Edition. Click here to subscribe.