The Land Trust for Tennessee is a private, not for profit organization.

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2 The Land Trust for Tennessee is a private, not for profit organization.

3 Mission: To preserve the unique character of Tennessee s natural and historic landscapes and sites for future generations.

4 The Land Trust for Tennessee is committed to protecting Critical watersheds and river corridors

5 Nunnelly Farm / Piney River Hickman County 995 acres

6 The Land Trust for Tennessee is committed to protecting Critical watersheds and river corridors Community and cultural resources

7 Dixona Farm Smith County 148 acres

8 The Land Trust for Tennessee is committed to protecting Critical watersheds and river corridors Community and cultural resources Natural landscapes and recreation corridors

9 Lost Cove Franklin County 3,000 acres

10 The Land Trust for Tennessee is committed to protecting Critical watersheds and river corridors Community and cultural resources Natural landscapes and recreation corridors Working lands

11 Circle A Farm Maury County 108 acres

12 Hunter s Hill Farm Davidson County 146 acres

13 Why do we do this? Every hour, we lose 7.6 acres of land in Tennessee

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18 Losing... Prime farmland

19 Losing... Magnificent landscapes

20 And seeing...

21 The Land Trust for Tennessee uses the conservation easement as its main tool for preserving land.

22 A conservation easement is a legal restriction that permanently protects land from future development.

23 Windy Acres Farm Robertson County 233 acres

24 What are the benefits of a conservation easement? MAINTAIN OWNERSHIP Landowner may: Live on it Keep it private Sell it Pass to heirs

25 What are the benefits of a conservation easement? MAINTAIN OWNERSHIP FLEXIBILITY Tailored to landowner s needs & desires Can be phased in over a period of time Totally voluntary

26 What are the benefits of a conservation easement? MAINTAIN OWNERSHIP FLEXIBILITY TAX RELIEF Can significantly lower estate taxes May allow heirs to keep the land in the family rather than be forced to sell it May provide landowner with income tax and property tax benefits

27 What are the benefits of a conservation easement? MAINTAIN OWNERSHIP TAX RELIEF FLEXIBILITY PERMANENCE & CONTINUITY Landowner s wishes remain in force forever Monitored by The Land Trust in perpetuity - even if land changes hands

28 Holland Farm Carroll County 200 acres

29 The Land Trust for Tennessee has protected over 58,000 acres through 180 properties across the state.

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31 Questions?

32 Contact Us: The Land Trust For Tennessee (LAND) Landtrusttn.org Offices or staff in: Nashville Sewanee Chattanooga Columbia

33 Estate Tax Example Situation: Farmer Jane dies in 2011 owning 200 acres of farmland in Jefferson County. Her farm is worth $3,000,000 and she has $200,000 in savings. She has 2 children and she leaves the farm to them under her will.

34 Example 1: No conservation easement donation Total Estate Value in 2011: $3,200,000 Total Federal Estate Tax that children will have to pay upon inheritance: approximately $990,000 in federal taxes (imposed at 45% on estate values over $1 million, so $2.2 million x 45%) Total Tennessee Estate Tax that children will have to pay upon inheritance: approximately $165,000 (imposed at ~7.5% on estate values over $1 million, so $2.2 million x 7.5%)

35 Example 2: conservation easement donation Remember.Total Estate Value in 2011: $3,200,000 Farmer Jane placed a conservation easement on her farm in 2006 and lowered the value of the farm to $700,000. So total estate is now valued at $900,000 and the children will have to pay no Federal Estate Tax and no Tennessee Estate Tax (Federal Rule: In 2010, no estate tax; In 2011, estates valued over $1 million and above are subject to federal estate tax (imposed at 45%)) (Tennessee Rule: Currently only estates valued over $1 million and above are subject to estate tax at rates between 5.5% and 9.5%)

36 2031(c)- additional Federal Estate tax savings: 2031 (c) says that if you die owning land subject to a conservation easement, in addition to the reduction in land value because of the easement, the estate can take an additional exclusion of 40% of the already reduced land value (exclusion is capped at $500,000) Example: $2,000,000 (the farm) -1,000,000 (the easement) 1,000,000 (the after value) -400,000 (the 40% exclusion) $600,000 (value of land in overall estate)

37 The current tax law: Federal Income Tax Benefits Allows a landowner who donates a conservation easement to deduct up to 30% of their AGI in any year Allows landowners to carry forward their deduction for up to 6 years (year of the gift plus 5 additional years) Congress currently considering a bill to enhance these incentives back up to the levels: would increase deduction amount to 50% of AGI in any year would allow full-time farmers to deduct 100% of their AGI increases the carry-forward period to a total of 16 years