Here are the costs we incurred for the first phase of our easement. When I say first phase, it means that we are going to do 4 phases so we can maximize the tax benefits. There are maximum amounts you can deduct off your Federal Return and claim on your State Return. If your ranch appraises for more than these maximums, I advise you to split the process up into sections where the value of each keeps you under these maximums each year of the phase in.
I will list the major costs and explain their relationship with the process.
1) Donation to CCALT: $10,000 This is a suggested donation to the Cattleman's for the privilege of using them for the easement. This is a one-time donation that covers the whole property regardless of the number of phases
2) CCALT legal fees: $ 2500 You may not hire a lawyer, but the Cattleman's will and you will pay for that lawyer. Remember, this lawyer is representing CCALT, not you. If you want representation, you will have to hire your own lawyer.
3) Appraisal: $6000-$18,000. This sounds like a lot, but it is your protection against the IRS coming at you for a bad value.
4) Baseline Inventory: $2500 Here again, this is a one-time fee for the Cattleman's to document the state of your ranch.
5) Mineral Rights: $1500 This fee is avoided if you own all the mineral rights on your land.
6) Title Work: $1800
So, you are looking at over $25,000 to do all this. And if you hire a lawyer, you are looking a even more. You may ask, why would it be of value to me. Besides the conservation aspects you have on your ranch that will protect the ranch for future generations, you will get a large tax benefit. If you have a maximum value, the Federal deduction will be aprox $845,000, and the state tax credit would be aprox $375,000.
Now, these figures are brought down considerably when you grind it through the tax system and the discount for selling the credits, but regardless, it is a pretty good amount and more than covers your expenses.
In addition to the tax benefits, there is also available money to add to the tax benefits. This money is donated funds for the promotion of the conservation of ranch lands by private individuals. Ask CCALT about these monies for your easement.
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