Donating Land to Nature Preserve - Is This a Simple 30% AGI Limit Deduction?

Thanks for the helpful info! Quick follow-up: if the 30% AGI limit means I can't deduct the full value this year, can I carry forward the excess to future years? And if so, for how long?

Yes, you can carry forward any excess contributions for up to 5 years. So if your AGI is $100,000, you could deduct $30,000 this year (30% of AGI), and then carry forward the remaining $38,000 to use in future years, subject to the same 30% limitation each year. If your AGI fluctuates in the future, that would affect how much of the carryover you could use each year. Just be sure to keep good records of the initial donation and your carryforward amounts to support these deductions in future years.

How accurate was the appraisal information it provided? I'm in a similar situation with donating family land and my biggest concern is getting the valuation right since the IRS seems to scrutinize that part closely.

Did taxr.ai suggest any qualified appraisers in your area? I had a terrible experience getting an appraisal for a donated time-share that ended up being rejected by the IRS because the appraiser wasn't properly qualified.

The system doesn't actually provide the appraisal itself - you still need a qualified independent appraiser for that. What it did was review my existing appraisal document and flag several items that were missing that could have caused problems with the IRS. It identified that my appraiser hadn't included their qualifications statement and was missing some required certifications on the form. Regarding finding qualified appraisers, it did provide guidelines about what qualifications to look for and offered to analyze potential appraisers' credentials against IRS requirements before I committed to hiring one. This was helpful because I learned that someone who appraises residential properties might not be qualified for conservation land appraisals in the IRS's view.

Wait, how does this actually work? Do they have some special access to the IRS or something? I've tried calling countless times about a similar donation question and always get disconnected after waiting forever.

Sorry, but I find it hard to believe this service actually works. I've been trying to reach the IRS for months about charitable donations of property. Even my CPA can't get straight answers. There's no way some third-party service can magically get through when nobody else can.

No special access - they use an automated system that redials and navigates the IRS phone tree for you. When they reach a human agent, they call you and connect you directly. It saves you from having to sit on hold for hours. I was specifically trying to get clarification on whether my conservation easement would qualify for higher AGI limitations (50% vs 30%) based on some specific uses of the property. The IRS specialist I spoke with was able to refer me to the exact guidelines and even emailed me the relevant publication sections. This is something I couldn't get from general tax advice online.

I had my land donation audited in 2022, and it was actually fairly straightforward because I had done everything right from the beginning. Make sure your appraisal is done by someone with specific experience in conservation or vacant land valuation. My appraiser included comparable sales data for 5-6 similar properties in the area, which the IRS accepted without question. The audit focused more on verifying that the charity was qualified and that they would use the property for their exempt purpose. Get a letter from them specifically stating how they'll use the land.

Thank you so much for sharing your experience! That's encouraging to hear. I'll make sure the appraiser includes plenty of comparable sales. Did you have to provide any other documentation during the audit besides the appraisal and the charity's confirmation letter?

The IRS also asked for documentation showing my ownership and basis in the property. I provided the original deed when my parents transferred it to me, property tax records showing how long we'd owned it, and an explanation of how the basis was determined. They also requested proof that the charity actually received the property, so I provided the recorded deed transferring ownership to them. One thing that really helped was including photos of the property with my original filing - it made everything more concrete and showed that this was undeveloped land consistent with the appraisal description.

That's brilliant! I hadn't thought about the impact of carryforwards potentially pushing me into lower brackets in future years. Do you know if there are any restrictions on donating portions of a single property over multiple years? Would each donation require its own separate appraisal?

Yes, each separate donation would need its own appraisal, which is the main drawback (extra cost). You'd need to legally subdivide the property unless your state allows donation of partial interests in specific ways. Another approach I've seen is donating a percentage interest each year (like 50% ownership one year, 50% the next) but that gets legally complex and requires special language in the deed. Some conservation organizations are familiar with this approach, but many smaller nonprofits aren't equipped to handle it. Also keep in mind that tax brackets might change in the future, so what works under current law might not be optimal if there are legislative changes.

This is excellent advice about the contemporaneous written acknowledgment! I'm actually in the early stages of planning a similar donation and hadn't realized how specific the documentation needs to be. One follow-up question: does the "related use" confirmation need to be obtained before the donation is made, or can it be provided after the fact as long as it's before I file my tax return? I want to make sure I get the timing right since I'm still in discussions with the local land trust about exactly how they plan to manage the property once it's incorporated into their preserve. Also, when you mention reducing the basis to zero - does this need to be reported anywhere specific on the tax return, or is it just for my own record-keeping purposes?