A
Adjusted gross income (AGI):
Your gross income minus business deductions, IRA and self-employed retirement deductions, and several other specialized items.
Appraisal:
The estimated sale value of property as determined by an appraiser, based on sales of comparable property or income potential.
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B
Bargain sale:
Sale of land or interest in land to a tax-exempt organization at a price less than the full fair market value.
Basis:
Your original purchase price (or value when inherited) plus the costs of certain improvements and less depreciation.
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C
Charitable contribution (gift, donation):
A gift of money or property to an IRS-qualified charitable organization or government entity.
Charitable Gift Annuity:
A method of donating assets, including land, directly to a qualified charitable group, which is then responsible for making annual payments to the donor. In one variant to this option, donors can defer their annuity payments to a later date (such as retirement). The deferment increases the charitable contribution in the year you transfer the property and also your future annual payments.
Charitable Remainder Trust:
A method of donating land or other assets to a third-party trust (managed by a bank or other financial institution). The trust handles the donor’s annual payments and, upon his/her death, transfers the remaining assets to the designated conservation group. Depending on the donor’s financial circumstances, goals and risk-tolerance, there are many trust variations, including the charitable remainder annuity trust (fixed annual payments), charitable remainder unitrust (floating annual payments based on an annual re-evaluation of the trust’s assets) and a flip trust (which “flips” from one trust type to another based on the sale of land or another pre-determined trigger event). The flip trust can be combined most easily with a land protection option.
Conservation easement:
A legal agreement between a landowner and a conservation group that permanently limits the uses of the land by you and all future owners in order to protect specified conservation values.
Conservation easement holder:
A nonprofit organization or government agency that accepts a conservation easement and assumes the long-term legal responsibility for monitoring and enforcing its terms.
Conservation easement monitoring fund:
A dedicated fund managed to support easement monitoring and enforcement. This fund is managed by an entity that holds conservation easements to ensure that adequate money will be available to take care of its easements over time.
Conservation groups, conservation partners:
As used in the context of this booklet, these terms include nonprofit organizations and governmental agencies whose missions include permanent land protection.
Conservation values:
Special natural and cultural qualities of a property, such as wildlife habitat, scenic views, public trails, productive agriculture and forestry, unusual natural features, unusual species and other qualities that are worthy of protection.
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D
Deed restrictions:
Covenants placed within a deed that limit certain future uses of the property.
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E
Estate tax:
A federal tax on the value of all assets owned at death. Estate tax is paid by the estate of the deceased person before assets are transferred to the heirs. The amount is based on your estate’s size and any applicable deductions.
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F
Fair market value:
The price that a willing buyer would pay a willing seller, neither being under any compulsion to buy or sell and both being fully informed about relevant facts.
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G
Gross taxable estate:
The value of all assets in which the decedent has an interest, including real estate, stocks, bonds, cash, bank accounts, personal property and life insurance proceeds.
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I
Inheritance tax:
The tax paid by your beneficiaries to the State of Iowa. The percentage is determined by the size of the inheritance as well as the beneficiary’s relationship to the deceased.
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L
Land trusts:
Non-governmental, nonprofit organizations involved in conserving land for its natural, recreational, scenic, historical and productive values. Land trusts work with landowners who are interested in protecting open space and use a variety of methods to permanently conserve land.
Life tenancy (life estate, life interest):
See reserved life estate.
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M
Mutual covenants:
Written commitments exchanged among neighboring landowners in deeds or separate agreements.
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O
Option to purchase:
A right, for a stated period of time, to acquire a specific property at a specific price.
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R
Remainder interest:
The interest conveyed to a charitable or governmental organization by a donor who conveys property to the organization, but retains the right (for himself or others person(s) to live on or use the property for his lifetime or for a stated number of years. (The interest that is being retained by the donor is the reserved life estate.)
Reserved life estate:
A right retained as part of a transfer of land whereby the owners or other individuals retain possession of the property during their lifetime. (See also remainder interest.)
Right of first refusal:
Agreement by an owner to offer a property to a specified individual or organization at the same price and terms as those in a future bona fide offer to purchase received by the owner.
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U
Undivided interest:
A fraction of the ownership interest in an entire property, where two or more owners share ownership of it.