A basic description of how the LandTrust for Central NC operates.

1. The LandTrust
For Central North Carolina

3. DAVIE
IREDELL
DAVIDSON
RANDOLPH
ROWAN
CABARRUS
STANLY
MONTGOMERY
Yadkin River Basin
RICHMOND
ANSON

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• 47 projects completed
• 5702 acres protected
• 4909 acres planned/pending

5. Conservation Easements
 Legal restriction on how property can be
developed into the future.
 Have been in use for nearly a century, and
courts have universally upheld.
 Usually perpetual (permanent), although
can be done for term of years
 Holding entity can be local land trust, local
Soil and Water Conservation District,
National Land Trust, or “sham” non-profit

6. Conservation Easements (Cont)
 Flexible documents custom tailored to each
property or landowner
 Require baseline documentation and
establishment of property’s resources to be
protected
 Become LIABILITY of holding conservation
organization! Must be monitored, and
violations must be corrected.

7. Conservation
Values
Wildlife Rivers/Streams Historic Scenic Education
Farmland
Habitat Riparian Land Properties Vistas Recreation

8. Natural Heritage Inventory
N Inventory Completed
Inventory Not Begun
Inventory Underway
W E
20 0 20 40 Miles
S

9. WHY ?

13. 1900 acre Cooleemee Plantation

14. Pisgah Covered Bridge

15. 300 acre
South Yadkin Refuge

16. Eagle Point Park

19. 317 acre John Green Farm

21. Clarke Creek Blue Heron Rookery

26. Implementation &
Conservation Economics 101
…Doing Well While Doing Good…

27. Who Can Apply For Grants?
Protection of Parks
Protection of Protection of
Water Resources Natural Heritage
$$$
Money
Available
Protection of Farmland

28. How Do We “Protect” Land?
Conservation Easements
 Restricts use of property in perpetuity; protects
wildlife habitat, farmland, forest land, park lands,
and natural areas
 Separation of most development rights from land
 Usually donated; landowner gets tax deduction

29. Determining the value of
Conservation Easements
 100 acres of land worth $2,000/acre
unrestricted
100 X $2,000 = $200,000
 Easement placed on it limiting future
development to no more than two new
houses (one house per 50 acres)
 Fair market value with the easement
restrictions now $1,200/acre
100 acres X $1,200 = $120,000
 Value of Conservation Easement =
$80,000

30. Tax Benefits of Conservation
 Value is deductible for Federal Income Tax
purposes, used against 30% of income, can
be spread over six years
 NC Income 25% Tax Credit up to $250,000
for individuals, $500,000.00 for
corporations, can be spread over six years
 May reduce property taxes & estate taxes

31. EXAMPLE OF INCOME TAX SAVINGS
Sarah & George earn $100,000
together.
•They’ll pay +/- $39,000 to IRS
•They’ll pay +/- $7,000 to NC DOR
SARAH AND GEORGE DECIDE TO
DONATE A CONSERVATION EASEMENT TO
THE LANDTRUST VALUED AT $200,000
5. Can reduce reportable income to $70,000 for 6 years to IRS.
• Would pay +/- $24,000 in taxes for 6 years ($90,000 savings)
6. Will get a $50,000 tax credit, therefore would pay NO state tax
for 6 years ($42,000 cash savings),

32. Federal Inheritance Tax
 Spouse pays no tax
 For 2004 no tax if estate is less than
$1.5million, $2 million in 2006
 39-50% current tax rate

33. Section 2031( c )
Federal Tax Code
 Additional Federal tax exclusion for
property under easement, 40% of value
of the land, excluding buildings, up to
$500,000 in 2004, Property under
easement must have been owned by
family for at least 3 years

34. Example
 Davie Johnson owns 300 acre farm on Highway 73 near
Concord worth $4.5 million ($15,000/acre). Davie is a widower.
– If Davie dies TODAY $3,000,000 subject to Estate
Tax and kids would pay approximately $1,300,000 in taxes.
(kids have to sell all or part of the family farm )
- If Daniel dies in 2007 and farm is worth $6,000,000,
then $4,000,000 would be subject to Estate Tax and kids would
pay more than $1,500,000 in taxes. (Assuming no additional
changes in Tax Code)
(kids have to sell all or part of the family farm )
Can You Do Better Than That??

35. YOU BET!!!
 Let’s say Davie called The LandTrust and
put a conservation easement on his
$4.5 million dollar farm in 2004.
- Appraiser deems farm to be “devalued”
to $2.5 million dollars. Daniel dies 3
years later and farm appraises at $2.8
million dollars as restricted. Because of
40% permitted reduction, farm deemed to
be $1.44 million and kids pay NOTHING!!!