What should I consider before deciding to donate?
Easement donors should be prepared for several things prior to completion of their donation.
1. Maintenance and Alterations
Owners will be responsible for upkeep and maintenance to the building at all times. Once a year, Easements Atlanta will conduct an inspection. Most repairs are allowed to be completed within a year or before the next inspection, whichever comes first. Owners must have any planned alterations pre-approved as well.
2. Legal and Financial Considerations
Easement donors must discuss prospective tax benefits and questions with their attorney or accountant. Prospective donors should also contact Easements Atlanta for a copy of the standard deed of agreement to study early in the process so that necessary clarifications or modifications can be worked out.
3. Costs of Application and Donation
Costs the owner/donor can expect to incur in the application/donation process are:
- $2,500 nonrefundable application fee
- Stewardship fee, determined by the Easements Atlanta Board of Directors
- Property appraisal fee
- Photography fee
- Property survey fee, if required
- Preservation consultant fee, if required
- Accountant and/or tax attorney fee
- Deed recording fee: approximately $50 depending on the length of the document
- End-of-year fees: all easement closings, recorded on or after December 1st, are subject to a $2,500 fee.
Donation Process
The historic preservation easement donor submits the completed 2-page Preservation Easement Application to Easements Atlanta. Then, the application is promptly reviewed and, if approved, the easement donor is sent an Easement Donation Closing Checklist, which includes an Acceptance Letter that must be signed by the easement donor and returned to Easements Atlanta with a non-refundable $2,500 application fee to cover the architectural review, legal fees, and administrative costs.
To qualify for a historic preservation easement donation and its associated federal tax benefits, a property must be either a certified historic structure or historically important land area. A certified historic structure is a building or structure that is either individually listed on the National Register of Historic Places or contributing to a National Register historic district or a certified local historic district.
If a property is individually listed on the National Register, that nomination form becomes part of the easement file, the site is considered certified, and no further action is necessary.
If a property is a contributing structure in a registered historic district, the easement donor must apply for a certification of significance.
The prospective easement donor should begin the process by contacting the Georgia Historic Preservation Division (HPD) here: taxincentives@dca.ga.gov
In many cases, the easement donor engages a historic preservation consultant who prepares the NPS application. Upon request, Easements Atlanta can provide a list of experienced historic preservation consultants.
The IRS requires that the mortgage lenders subordinate their rights to the rights of the Easements Atlanta so that we may effectively enforce the preservation easement in perpetuity.
If a mortgage exists, a subordination agreement, with a copy of the Preservation Easement Deed, must be submitted to each mortgage lender for its approval. The subordination agreement shall be recorded concurrently with the recordation of the Preservation Easement Deed Agreement.
The preservation easement donor engages a qualified real estate appraiser to perform the appraisal which must be prepared no earlier than 60 days prior to the preservation easement donation date but no later than the due date (including extensions) of the income tax return in which the charitable deduction is first claimed. The appraiser will provide you with a signed 8283 Tax Form reflecting the value of your gift.
A prospective donor may contact the Appraisal Institute to find a qualified MAI appraiser here.
Once the Closing Checklist is complete, the Easement Deed Agreement may be executed. The easement donor submits the signed and notarized Easement Deed Agreement to Easements Atlanta. In return, Easements Atlanta reviews and signs the Easement Deed Agreement. Easements Atlanta records the Easement Deed Agreement with the county land records office and forwards a copy to the easement donor and mortgage lender(s). The one-time stewardship contribution is due within thirty (30) days of receipt of the stamped recorded copy of the Easement Deed Agreement.
Lastly, the easement donor submits a completed IRS Form 8283 to Easements Atlanta for signature. The easement donor then includes the IRS Form 8283 with their income tax return for the year in which the preservation easement is donated and a deduction is first claimed.