Bargain Sales and Other Sales
Bargain Sales: In some instances, CLCF purchases lands that are ecologically significant or possess outstanding scenic views. A bargain sale is a tool that can be a win/win for both a landowner and CLCF.
One alternative to a fair market sale is a bargain sale, in which the land is sold at less than its fair market value. A bargain sale combines the income-producing benefit of a sale with the tax-reducing benefit of a donation. It can also avoid the expense of a sale on the open market. The difference between the land’s appraised fair market value and its sale price is considered a charitable donation to the land trust and can be claimed as an income tax deduction.
Other Sales: Selling your land at fair market value to a land trust may seem like an obvious way to conserve land. However, as nonprofit organizations, land trusts often have limited funds. When CLCF does purchase land, it reserves fair market value purchases for parcels that have a broad-reaching ecological, open space or public benefit values.
A fair market sale may not be as advantageous for a landowner as it might seem. Capital gains taxes on the property’s appreciated value, along with selling costs, such as a realtor’s commission, can substantially reduce the profits from a fair market sale, particularly for landowners in higher tax brackets who are disposing of highly appreciated property.