The farm has been in your family for years. It is a reflection of you and your lifetime of work. You want to leave a legacy, a reminder of your family's heritage and the values your family farm represents.
Many people - perhaps very much like you - have been rewarded with a sense of security by donating their family farms to support and advance agriculture and the life sciences at NC State University. Donations can be made to anyone of the foundations listed on the back, all of which support the College of Agriculture and Life Sciences at NC State.
This page shares with you the various ways of becoming a family farm donor. You will also read testimonials from farm donors who have dedicated their family heritage to benefit the College of Agriculture and Life Sciences.
Perhaps you find yourself in one or more of these situations:
- No one in your family is interested in managing the family farm;
- You wish to provide yourself with more income than the farm is producing;
- The care of the family farm is more than you wish to handle;
- You desire to generate an income stream for yourself and another family member during your lifetimes;
- You want the peace of mind gained by knowing how your farm will be managed in the future.
A well-planned charitable gift of your family farm to the College of Agriculture and Life Sciences at NC State may serve your present and future needs. It can solve income and management problems and may provide significant income and estate tax benefits. Funds generated by your charitable gift will support important work in agricultural teaching, research, and extension. You may designate the program or programs that you want to benefit from a gift of your farm. There are a number of ways to transfer your farm to the College of Agriculture and Life Sciences at NC State. The following six methods can help you decide which is best for you.
OUTRIGHT GIFT
An outright gift of property is often the best method for donors with substantial assets other than the property being donated. If you have owned the property for more than one year and there are no debts payable on the farm, you will receive:
- An income tax charitable deduction for 100 percent of the fair market value of the property at the time it is transferred. In the case of land to be permanently held by the college for research purposes, you may be eligible to receive a North Carolina tax credit (dollar for dollar) based on the appraised value of your gift;
- No capital gains taxation on the property's appreciation in value, plus a charitable deduction may be taken for the fair market value of the appreciated property;
- An outright gift will remove the value of the farm from your taxable estate.
Note: All Federal and North Carolina tax deductions or credits may be utilized over a six year period (the year the gift is made, plus the next five years).
"I feel confident I did the right thing. I love that farm, I love that land I want it to become a place that will ensure lasting improvements in agriculture."
- Ruby McSwain, Sanford, N.C.
Ms. Ruby McSwain of Sanford, N.C. made the largest planned gift in the history of the College of Agriculture and Life Sciences at NC State. Her gift consisted of an 11 room historic home and 300 acres of prime Lee County farm and timberland, along with an outright gift to support research and extension activities in Lee County. Ms. McSwain also established an endowment to maintain the historic home and the farm.
OUTRIGHT GIFT BY WILL
Leaving your farm to the College of Agriculture and Life Sciences at NC State through your will may be the most appropriate option for you. Will bequests provide a means of documenting your commitment to NC State without diminishing the assets available to you during your lifetime. This type of gift affords a 100 percent charitable deduction for federal estate tax purposes. Such a gift can significantly reduce the erosion of your estate by taxes.
A fund established through your will is normally named for the donor or a person the donor chooses to honor. Our staff will work with you to write a memorandum of understanding that designates how the fund's income will be used.
University development professionals can assist you and your advisers by providing appropriate will or trust language to achieve your desired gift.
RETAINED LIFE ESTATE
You can transfer ownership of your family farm to the College of Agriculture and Life Sciences at NC State now but retain the use and enjoyment of the property for the rest of your life and the lifetime of your spouse or another person. This type of gift qualifies for an income deduction in the year the gift is made. Donors who use a Retained Life Estate continue to provide maintenance and pay property taxes and other expenses. Donors also retain the right to rent the property or give it to the College of Agriculture and Life Sciences during their lifetime.
CHARITABLE REMAINDER TRUST
(also known as LIFE INCOME GIFT)
You may wish to make a gift of property during your lifetime, but continue to receive income. You can do so by establishing a life income trust that will provide you an income for life or for a period of years to you or to other beneficiaries you name. A gift structured this way has the following advantages
- Possible improved annual income. The trust must have a minimum payout of at least five percent of the value of the land, which in some years would exceed the actual income of the farm.
- Avoidance of the capital gains tax. Property owned for more than one year avoids capital gains tax when transferred into the trust.
- An income tax deduction can be taken in the year the gift is made. Any unused deduction can be carried over for up to an additional five years.
- A possible estate tax charitable deduction, which can reduce or eliminate federal taxation of your estate.
"We want to help students attain their full potential. An investment in young people is an investment in the future."
- Charles Suggs, Raleigh, N.C.
Charles and Jane Suggs donated two 40 acre tracts of prime timberland to the College of Agriculture and Life Sciences at NC State. The property is being used to fund a trust in the NC Agricultural Foundation, Inc. The income will be used in the future to provide scholarships for students enrolled in the Department of Biological and Agricultural Engineering.
USING YOUR WILL TO ESTABLISH A LIFE INCOME TRUST
If you are married and wish to provide for your surviving spouse or other beneficiary, you can provide a life income trust under your will, which will allow you to:
- Retain management control of your farm during your lifetime;
- Relieve a surviving spouse or other beneficiary of the responsibilities of ownership and management;
- Provide a more diversified and productive source of income for the surviving beneficiary;
- Minimize estate taxation;
- Establish a significant named memorial fund.
All of these objectives can be met using your will or living trust to create a charitable trust funded by a gift of farmland. The trust is created upon the death of the donor. The trust will make payments for the lifetime of the surviving beneficiary and the remainder will benefit the designated foundation.
Great care must be taken in drafting the charitable trust portion of a will or living trust to ensure the availability of the estate tax deduction. Please contact the College of Agriculture and Life Sciences at NC State if you are considering establishing this kind of trust.
BARGAIN SALE GIFT OF FARM
If the current value of the farm exceeds the amount you wish to give, the property may be sold to the college for less than its fair market value.
You may take a charitable gift deduction for the difference between the value of the farm and the price you receive. Such a gift provides income tax savings through a charitable deduction and may also reduce estate taxes.
"This gift does everybody a tremendous amount of good.
As a developer I want to show folks that I can also be an environmentalist. This gift will help ensure the continuation of environmental education in North Carolina.
- Jim Griffin, Holden Beach, N.C.
Holden Beach Enterprises made an outright gift of 29.29 acres of coastal land to the College of Agriculture and Life Sciences at NC State for the development of the Drew Griffin Environmental Research Facility. This gift will help the university create a site where soil scien-tists, zoologists, biologists and their students can develop the knowledge needed to protect environmental quality.
* Please contact the College of Agriculture and Life Sciences Foundations Office for information on other types of real estate gifts, including commercial and residential properties and environmentally sensitive areas.*
