Farm or Ranch
The family farm or ranch can make an ideal gift to the Church or one of its institutions. Family farms and ranches may create difficult estate management issues since children frequently do not wish to continue farming or ranching. Selling your farm or ranch in an estate sale often results in an undervalued sale price and the loss of what you and your ancestors have spent years building. A gift of your farm or ranch to the Church or one of its institutions in conjunction with other parts of your financial and estate plan can eliminate many of these challenges.
A typical ranch or farm consists of land, equipment, livestock, and crops. Each of these elements should be considered separately in the planning process to help you and your family achieve your charitable objectives.
The typical donor:
- Has paid off the mortgage.
- Holds title to the farm or ranch.
- Does not have children who want to continue farming or ranching.
- Desires to reduce management responsibilities.
Gift features and benefits:
- Immediate income tax deduction
- Avoidance of capital gain taxes
- Deduction based on fair market value, or present value of remainder interest if placed in a Charitable Remainder Unitrust
- You may continue living on the farm or ranch if you use a Retained Life Estate Deed
How Do I Make a Gift of a Farm or Ranch?
A gift of a farm or ranch to the Church or one of its institutions must be reviewed and evaluated by the Church Real Estate Division. Philanthropies can assist you with this process. A Real Estate Packet (Download Adobe Acrobat to view this packet) of specific information about the farm or ranch must be completed and sent to Philanthropies. Once a Real Estate Packet is received by Philanthropies, the evaluation process may take 60 to 90 days to complete. This process includes a physical inspection, environmental assessment, title report, appraisal, and so forth. When the evaluation is complete, you will receive notification of the results.
For tax purposes, you must obtain your own appraisal to determine the fair market value you claim on your income tax return. Your tax return must include IRS form 8283 signed by your appraiser.
How Do I Make a Gift of a Farm or Ranch Using Gift Planning Tools?
Farms and ranches can also be given to the Church or one of its institutions with a Retained Life Estate Deed Using a Personal Residence or Farm. This planning tool allows you an immediate income tax deduction while you continue to live on and use your farm or ranch. Farm or ranch property can also make an ideal gift by funding a Charitable Remainder Unitrust which provides you both income for life and numerous tax benefits. A farm or ranch can also be given through your Will or Revocable Trust.
Other Facts You Should Know about a Gift of a Farm or Ranch
The gift of your farm or ranch may have an emotional impact on family members and should be considered in relationship to other elements of your overall financial and estate plan. Philanthropies professionals will be happy to discuss these issues with you.