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Tax law changes prompt $100,000 gift
A Sequim supporter of North Olympic Land Trust, who wishes to remain anonymous, has given $100,000 to the nonprofit organization, prompted by recent changes in federal income tax law. “As the Land Trust keeps protecting more land, it seemed to me that it is going to be kind of expensive to take care of it,” the donor told the organization’s volunteer communications specialist, Robbie Mantooth. “Then this tax provision came along and made it a nice, easy thing to do. It really helps if you take the standard deduction.”
Older donors get tax breaks
The tax changes allow a donor who is at least 70 1/2 years old to give up to $100,000 per year directly from an individual retirement account (IRA) without paying any taxes on the donation. The local donor, who is in his 80s, said he hopes other eligible people learn about the opportunity. He was glad his career as an investment professional may have helped him know about the new benefits, which apply to all charities with tax-deductible status.
The local donor said he became aware of North Olympic Land Trust when he and his wife bought land along the Dungeness River before moving to the North Olympic Peninsula. “We didn’t think the land should be developed and offered it to the Land Trust,” he said. The Land Trust asked them to donate development rights through a legal agreement known as a conservation easement, which the nonprofit organization would uphold in perpetuity.
“This incredibly generous, landmark gift to the Land Trust is a strong vote of confidence for our organization,” said Sharon Stevenson, the local organization’s Development Manager.
“This donor’s obvious support of our mission has come at a crucial time as our perpetual obligations increase with every conservation agreement we secure, and we are doing a good job of securing them.” Stevenson said the $100,000 donation is the largest single cash contribution the Land Trust has received since local citizens established it in 1990.
“It will directly and immediately affect the organization’s financial stability, providing stewardship for Land Trust operations, as well as the land,” she said. Land Trust leaders have a long-range goal of being able to fund operations from an endowment fund’s income, which the donation could help fund. Local Land Trust Board member, Dave Hurd, CPA, said professionals who are managing IRAs should be aware of the law and the fairly simple procedures for people to take advantage of it.
“This is really a good deal for people who have charitable intentions,” Hurd said. Even though making a donation from an IRA doesn’t qualify as a charitable donation deduction, he said using the IRA as the vehicle to make the donation can provide even greater tax benefits.
“It doesn’t have to be a $100,000 donation. Any amount can help,” he said, noting that potential donors should talk with their tax advisers about how the tax benefits might fit with their individual situations. Donors must arrange for checks to be written to charities by those managing their IRAs, rather than making withdrawals and then using the money to make donations, Hurd emphasized.
More changes help development rights donors
Other recent tax law changes have increased income tax deduction opportunities for landowners donating development rights. Those provisions extend the period when tax deductions for voluntary conservation agreements can be carried forward to 15 years from the previous five. It also raises the limit on those deductions to 50 percent of the donor’s adjusted gross income from the previous 30 percent. The legislation includes tighter rules and Internal Revenue Service oversight for donated development rights and property. The local Land Trust’s Conservation Manager Allison Lutz said North Olympic Land Trust already complies with those rules and is working toward meeting requirements of a nationwide accreditation program as soon as the Land Trust Alliance (LTA) finishes developing it.
The accreditation program, new appraisal requirements, and IRS oversight are part of a three-pronged approach to “solidify and build public confidence in the private land conservation system,” according to LTA President Rand Wentworth. The new tax benefits for IRA and conservation agreement donations are scheduled to be in effect only this year and next, but charitable organizations are pushing for them to be extended or become permanent, Stevenson said.
Currently the Land Trust is protecting more than 1,300 acres, mostly through conservation agreements. It owns about 100 acres. Agreements focus on protecting such special qualities as habitat for salmon and other wildlife, farmland, sustainable timberland, clean water and air, scenic vistas and open space, and historic areas.
More information about the Land Trust is available at North Olympic Land Trust’s office or call us at 360-417-1815.
This entry was posted on Thursday, December 14th, 2006 at 10:50 am and is filed under More News.