February 17, 2021 – Farming is the backbone of Iowa and our land is an essential natural resource for our state. However, the people who care for and work the land are changing. Landowners across Iowa are aging. According to a 2017 study by Iowa State University, 95% of Iowa farmland is owned by people age 65 and older, and the farmland has started to change hands with this transfer expected to occur at an increasing rate.
This changing of hands is part of a greater transfer of wealth occurring. It has been estimated that over $824 billion is expected to pass from one generation to the next in Iowa over a 50-year period that started in 2010. Much of this wealth, including land or proceeds from the sale of land, may be heavily taxed. With this in mind, many landowners may be looking at how they can create benefits for their family and continue to make a difference in the hometowns they love – even after retirement or death.
What many farmers and landowners may not be aware of is that there are options through the Benton County Community Foundation to keep the land they love in production, while receiving tax benefits and supporting their community for generations to come. Assets of farmland can be gifted as a whole or in part for a charitable purpose through gifts of real estate through certain programs like the Community Foundation’s Farmland for Good program.
“One example of the Farmland for Good program in action is a donor could make an outright gift of farmland, either during their lifetime or upon their death, and instruct the Community Foundation to rent the land for a set number of years with earnings from the land going to a permanent endowment fund established with the Community Foundation,” said Terry Gaumer, affiliate development director with the Community Foundation of Northeast Iowa. “The fund would then benefit the nonprofit or community entity of the donor’s choice.”
There is also the option to create a charitable life estate where the donor retains income and use of the land for life. When a person gives the Community Foundation or other qualified charities all or a portion of his or her estate, the value of the land acts as a charitable gift deduction on his/her tax return. With a plan, you can reduce the estate tax burden and possibly eliminate it. More importantly, landowners can leave a charitable legacy for their community.
Every landowner’s situation is unique, and the Community Foundation recommends you discuss options with a tax or financial advisor. More information about the Farmland for Good program can be found at www.cfneia.org/farmland4good or by contacting Terry Gaumer at 319-243-1354 or firstname.lastname@example.org.
To learn more about the Benton County Community Foundation, visitwww.bentonccf.org.
The Benton County Community Foundation is a local organization making grants to organizations creating a stronger and more vibrant quality of life in Benton County and helps people establish permanent funds for the causes they care about in their community. The Benton County Community Foundation is an affiliate of the Community Foundation of Northeast Iowa, a nonprofit committed to creating long-term impact in 20 counties in Iowa. For more information, contact 319-287-9106 or visit www.cfneia.org. CFNEIA is confirmed in compliance with National Standards for U.S. Community Foundations.