Naveen Mohan from New York Posted February 22, 2017 Report Share Posted February 22, 2017 I have a new client who sold conservation easement on 154 acres of their agriculture land to local Agricultural Stewardship Association for $ 195,000. The closing statement issued by the attorney is saying that it is not a bargain sale and seller's donation is zero and the transaction occurred from their irrevocable trust which they had set up for Medicaid purpose.. My understanding is that it would be a schedule D transaction, My problem is that both husband and wife are in their mid eighties and they have no idea except that they got $ 195,000 which they had put in bank. I had to call the organization buying the easement to get a copy of 1099 that they had issued me and their attorney has give me the bill of sale. How do I go about getting a handle on the basis of easement? Thanks for your help. Naveen Mohan Quote Link to comment Share on other sites More sharing options...
Richcpaman Posted February 22, 2017 Report Share Posted February 22, 2017 You talk to the people who got the money. They own the land, and the property. Their basis in that property is reduced to zero, and then whatever is left over is subject to tax for the sale of the easement at capital gain rates. If they have basis of $200k in the property, then they are free and clear, Otherwise the rest is taxed. I have one in 2017 who sold an easement for $800k, with a basis of $400k... The taxman cometh... Was an appraisal done? Could there be a charitable contribution of some sort? Rich 1 Quote Link to comment Share on other sites More sharing options...
Abby Normal Posted February 22, 2017 Report Share Posted February 22, 2017 One question I couldn't find the answer to was, if you sell an easement for less than FMV can you take a charitable contribution for the difference? Quote Link to comment Share on other sites More sharing options...
Richcpaman Posted February 22, 2017 Report Share Posted February 22, 2017 5 hours ago, Abby Normal said: One question I couldn't find the answer to was, if you sell an easement for less than FMV can you take a charitable contribution for the difference? If the easement was worth $500k. Development rights, for example, and then you sell them to a qualified charity for $300k, then you might have a $200k charitable contribution. That is why you need the appraisal. Rich 1 Quote Link to comment Share on other sites More sharing options...
Abby Normal Posted February 22, 2017 Report Share Posted February 22, 2017 Thanks, Rich! Quote Link to comment Share on other sites More sharing options...
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