Fair market sale

My land is my primary asset and I can’t afford to simply give it away. However, it has some great natural features and I’d sure like to see them protected.

Conservation groups can and do purchase land at fair market value—though their acquisition funds are limited.

Easing the sale

If you truly care about protecting your land’s natural resources but want fair market price, consider easing your conservation buyer’s purchase through non-financial means. While many of these incentives can aid other sale options, they are particularly helpful for fair market purchases.

Option to purchase: If a conservation group lacks ready cash to purchase your land, you can grant an option to purchase. You and the conservation buyer agree on a specific sale price and terms, including a specific amount of time during which the buyer may exercise its exclusive right to purchase your land. During that time, you cannot sell to anyone else. If the option expires, you have no further obligation to that buyer.
Extended payment terms: You can give your conservation buyer time to raise purchase funds by offering a contract or installment sale. This strategy might also help you extend your income and tax benefits.
First Right of Refusal: If a conservation group expresses interest in purchasing your property but you’re not yet ready to sell, you may grant that buyer a First Right of Refusal. This right gives a conservation buyer a specified period of time to match any bona fide offer that you receive from another potential buyer. Before accepting this outside offer, you are obligated to allow the conservation group to purchase the land for that amount.

Weighing your options

Before setting your price, see the side-by-side comparison of the pre-tax and after-tax proceeds of a fair market sale, bargain sale and full donation. As you’ll see, your bottom line isn’t measured by your sales proceeds alone but by how much you get to keep after taxes.

Meanwhile, bargain sales and donations also provide intangible benefits, such as protecting your family’s legacy and future.

Find more details about the financial and tax impacts of conservation protections.