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I've worked with several non-profits on similar structures. One approach to consider is forming a separate for-profit entity that acquires the land, with investors who are looking for the tax benefits. The non-profit would then be granted specific rights to implement the regenerative agriculture projects. The key is making sure the conservation easement genuinely restricts development rights that have real value. If you're looking at agricultural land with legitimate development potential that you're permanently restricting, that can work. But if you're trying to inflate values artificially, you're heading for trouble.
Thanks for sharing this structure! I'm curious - how do you typically handle the ongoing relationship between the for-profit entity that holds the land and the non-profit doing the regenerative work? Is there a lease arrangement, or do you set up some kind of management agreement?
We typically use a long-term management agreement that gives the non-profit the right to implement their regenerative programs while the for-profit entity maintains ownership. This agreement needs to be established before the easement is placed, as it becomes part of the baseline documentation. For funding, we usually structure it so a portion of the tax benefit received by investors flows to the non-profit through a contractual arrangement. This provides ongoing operational funding beyond just the initial land access. Be careful though - the management fees must be reasonable and market-based, or the IRS might view the entire arrangement as a disguised donation scheme rather than a legitimate business structure.
Has anyone tried using partnership structures where investors get both tax benefits AND a share of agricultural revenue? We set up something similar for a client where they placed a conservation easement on 70% of the property, but kept 30% available for sustainable agricultural production. The investors got their tax deduction plus ongoing income from the farming operation.
3 Another important thing to consider - if your girlfriend claims the kids with such low income, she might qualify for other government benefits too. When I was in a similar situation, my tax refund helped me qualify for education grants that completely covered my associate's degree. Make sure she also checks if this will affect any benefits she's already receiving. Sometimes a big tax refund can temporarily push you over income limits for certain programs, so plan accordingly!
17 This is really good advice! My sister got a huge refund from EIC and it messed up her Medicaid for two months because it counted as income. She had to pay out of pocket for her prescriptions until it got sorted out. Definitely worth looking into how it affects other benefits.
3 Absolutely right about the potential Medicaid issue. The good news is that tax refunds only count as a resource for 12 months after receiving them for Medicaid purposes, so it's temporary. For SNAP benefits (food stamps), federal tax refunds don't count as income at all. For education grants, the FAFSA doesn't count tax refunds as income either, which is why it can be such a good opportunity for low-income parents. I was able to use my refund to cover childcare while I took classes, and the Pell Grant covered everything else. Changed my whole career trajectory!
14 Just to add another perspective - I was in your girlfriend's exact situation in 2022. I only made about $5800 that year while my boyfriend supported us and our twins. I claimed both kids and received almost $11,000 in tax refunds through EIC, Child Tax Credit, and Recovery Rebate Credit (that was during Covid). The only issue we ran into was that my boyfriend had already claimed one of our kids the previous year, so the IRS flagged our returns for review. We had to submit extra paperwork showing our living situation had changed, but ultimately everything was approved. Just document everything - keep records showing the kids live with you both (school records, medical records), proof of your address, etc. Better safe than sorry!
can i just say that i did my taxes drunk last year using turbotax and it was actually fine lol. the software really does walk you thru everything step by step. if ur return is simple (like just w-2 income) its literally impossible to mess up i would NEVER pay $1100 for someone to enter the exact same info into the exact same software i can use myself for like $50!!! thats just crazy
Former tax preparer here. The big secret tax prep offices don't want you to know: if your return is simple (W-2 income, standard deduction), the $800+ they charge is basically for data entry. The software they use is often just a professional version of the same consumer tax software you can use at home. Most seasonal tax preparers get minimal training (sometimes just a week or two) before tax season. Where professional help becomes valuable is if you have complex situations - business income, rental properties, complicated investments, multiple state returns, etc. Even then, shop around because prices vary wildly.
Has anyone noticed how dumb it is that they don't let you use your unused AOC years for grad school? Like... why does it matter what level of education it is if you haven't used all 4 years? The tax code makes no sense sometimes!
The AOC was specifically designed to encourage and support undergraduate education. The government allocated funds differently for different education levels. It's not about logic so much as different policy priorities. Graduate education is subsidized through other mechanisms like the Lifetime Learning Credit.
FYI - make sure to keep really good records of which education credits you claim each year. My son had his return flagged for review because we apparently claimed the AOC for too many years (we didn't realize his community college year counted toward the 4-year limit). The IRS is definitely tracking this stuff!
Fatima Al-Suwaidi
I'm a loan officer and I see this confusion all the time with clients. Here's a simplified way to think about it: Initial mortgage points: These helped you BUY the house, so they're part of the acquisition cost = immediate deduction. Refinance points: These just helped you get a better LOAN, not buy the property = spread the deduction over loan term. It's like the difference between buying a car (deduct sales tax now) versus refinancing that car loan later (no immediate tax benefit).
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Zoe Papanikolaou
ā¢Thanks for the simple explanation! One more question - does this same logic apply to discount points vs origination points? My closing disclosure shows I paid both types but I'm not sure if they're treated differently.
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Fatima Al-Suwaidi
ā¢Both discount points and origination points on a refinance follow the same rule - they must be amortized over the life of the loan. The IRS doesn't distinguish between them for tax deduction purposes. The one key difference is making sure the origination points are actually for interest rate reduction and not just labeled fees for processing the loan. True points are a percentage of the loan amount paid specifically to reduce your interest rate. Some lenders call various fees "points" but if they're just service charges, they're not deductible at all.
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Dylan Cooper
Has anyone used tax software to handle refinance points? I tried doing this in TurboTax last year and found it super confusing. It asked if I paid points but didn't clearly separate refinance vs purchase points.
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Sofia Morales
ā¢I use H&R Block software and it actually handles this pretty well. There's a specific section for mortgage interest where it asks if the points were for a purchase or refinance. If you select refinance, it then calculates the annual deductible amount based on your loan term. One tip - save your closing disclosure! The software will ask for the exact amount of points paid and the length of your new loan to calculate the yearly deduction correctly.
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Dylan Cooper
ā¢Thanks for the recommendation! I might switch from TurboTax this year. Was starting to think I needed to hire an accountant just for this one issue.
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