Bargain sale
For a landowner interested in conservation who cannot donate land directly, a bargain sale of property to a land trust insures the land will be protected. With this option, the land trust purchases land at less than full-market value. The benefit to the landowner is twofold:
- the sale produces needed income and,
- he/she can claim the difference between the sale and full-market value as a tax-deductible donation.
More intangible but equally important, landowners can be assured that valuable land and water resources will be protected.
Sale at Fair Market Value
Sale at fair market value is the sale of property at the price a knowledgeable buyer would pay for the land. Most conservation organizations are not able to purchase land at full value due to insufficient funds. If the land is sold at full value and has appreciated in value since its purchase, the seller will be liable for income tax on the capital gain. This can affect the net profit from the sale. There are no charitable deductions associated with a sale at full value.
For more information on conservation options, visit The Compact of Cape Cod Conservation Trusts website.