Tax and Estate Planning

Depending on a landowner's financial or family status, the receipt that accompanies the donation of a conservation easement may be very handy in tax or estate planning.

For example, passing land to children may not trigger a taxable capital gain for certain landowners, but you may want to pay it anyway. That tax is not eliminated in the rollover, just deferred. Using your tax receipt, you may be able to eliminate some taxable capital gain, and pass the land on to your children without that burden.

For most agricultural landowners, their land is their retirement nest-egg. Yet they may also have cash in an RRSP, while carrying a mortgage on their land. A tax receipt can allow such a landowner to retrieve his/her RRSP tax-free, then apply that money to lowering the mortgage.

Many landowners have financial dealings unrelated to their land, yet an easement tax receipt can offset capital gains on investments or other taxable proceeds.

One Alberta land trust, the Southern Alberta Land Trust Society, has developed a program to make ranching landowners aware of these tax and succession planning possibilities.

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