You might not think it would be possible to make a significant, ecologically important gift of land to The Nature Conservancy in your lifetime while at the same time deferring capital gains tax and maintaining use of the property. Yet that was just the case when Tim and Teresa Myrick sold their vacation home lot in South Carolina and acquired 80 acres of pristine mountain land in a Conservancy priority area in their home state of Tennessee.

The Myrick's initial decision to leave their South Carolina property as a bequest to The Nature Conservancy was a simple one. They soon realized, however, that having the property go to the Conservancy eventually wasn't soon enough for them. So they decided to sell the South Carolina property in order to benefit the Conservancy today. The arrangement that resulted turned out to be a mutually satisfying arrangement from both a financial and ecological point of view for both the Conservancy and the Myricks.

Although the Myricks had already left the property to the Conservancy in their will, they were not in a position to give up all of the equity that they had in their property immediately - they wanted to keep it as a reserve asset in case of unexpected future needs. They also wanted to be able to use the land. So Conservancy staff searched for a property that would meet the Conservancy's specific requirements for ecological importance and that would please the Myricks.

The Shady Valley Farm in Tennessee, located in the Appalachian Mountains with a trout stream, pond, hillside and pasture, fit the bill perfectly. Only a few hours drive from their home, it was an ideal retreat for the Myricks and an ecological gem. Sitting adjacent to an existing Conservancy preserve, the Myrick's new property purchase and subsequent easement ensured the permanent protection of the remaining preserve boundary and watershed.

Making it work
The owner of Shady Valley Farm agreed to put off the sale of his property until the Myricks had sold their South Carolina property. Once the Myrick's property sold, they utilized a 1031 “like-kind” exchange to acquire Shady Valley Farm. The 1031 “like-kind” exchange deferred the usual capital gains tax that the Myricks would have been subject to had they sold the property outright. Specific rules govern this transaction which involves the exchange of one property for another of equal value. The Myricks then pledged a conservation easement on the farm to ensure its protection, forever. When that easement is in place, the Myricks may be entitled to a tax deduction for the value of the donated easement.

Is it right for you?
Are you interested in donating real estate, but want to maintain access to the equity that you have in it and enjoy the use of it for the rest of your life? Most importantly, do you want to see, today, exactly how your generosity will affect the preservation of the world's most important and magnificent natural places?

If so, you may want to consider crafting an arrangement like the Myricks'. Conservancy staff will work together with you and your financial advisor to help you exchange your property for another that will help the Conservancy fulfill its mission to protect the world's diverse plants and animals. In the process, compared to selling the property, you may reap considerable tax benefits while having the satisfaction of knowing that you have preserved an important natural place for people and wildlife.

Personal satisfaction
For Tim and Teresa Myrick, whose South Carolina property took an unusually long two and a half years to sell, the extended relationship with the Conservancy offered them a unique opportunity to deepen their understanding of the Conservancy and how it works to accomplish its mission. Their extraordinary dedication to making the deal work strengthened their commitment to the Conservancy and made them a real part of the process and the success of the arrangement. As Tim says, “We are so impressed with all that's being done by the Conservancy that it's very humbling to be considered part of the team.”

For the Conservancy, working in a time when the availability of important natural lands is rapidly diminishing, being able to acquire land today is a great boon. Having the means to take advantage of what natural places are available today means the Conservancy is another step closer to fulfilling its ambitious mission.

And the Myricks, now members of the Conservancy team, have the best of all worlds: retention of their asset, tax benefits, the use of the land, and the knowledge that their new “corner of the world” will be protected for future generations to enjoy.

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