Farms, tax planning, & funding a family legacy
With 2,802 parcels of vineyards and 65,000 acres of farm and ranch lands, its likely you have a client who owns an acre or two, representing millions of dollars of family wealth.
Farmland and vineyards, like many other hard-to-value assets, tend to carry plenty of emotional attachments. These properties can be hard to deal with in an estate plan because of the challenges of multiple owners and the complexity of the estate tax as it’s applied to farm-related assets. However, there are some excellent philanthropic options for your clients who own farmland or vineyards.
Multiple ways to structure a gift
A Fund at Napa Valley Community Foundation can receive a tax-deductible gift of farmland/vineyards in a variety of ways:
- An outright gift is always an option; lifetime gifts of farmland/vineyards held for more than one year are deductible for income tax purposes at 100% of the fair market value of the property on the date of the gift, which also avoids capital gains tax and reduces the value of the client’s taxable estate.
- Other ways to give this type of land include a bargain sale or a transfer to a charitable remainder trust which produces lifetime income for your client.
Keeping the family together
A gift of farmland/vineyards to a Fund at Napa Valley Community Foundation doesn’t just provide tax benefits. The gift also helps your client overcome the emotional challenges associated with letting go of an asset that in many cases has been in the family for generations. We can work with your client to extend the emotionally important, family-related dynamics that were previously linked to the land, even after we sell the land and the client’s fund holds the proceeds.
For example, multiple generations of family members can serve as advisors to the fund and collectively recommend grants to charities that carry on the values held by the family during the years it operated the farm/vineyard, such as funding agricultural scholarships, promoting sustainable farming, or supporting programs that educate entrepreneurs about how to build a successful farming/vineyard operation.
Our team is happy to help you and your client structure a gift of farmland/vineyards to a Fund at the Foundation so that the client’s family members can continue to work together even after the farm is sold.