LAUREL CANYON —Looking around the neighborhood it’s hard to believe that there are rules for walls and fences. It seems that the city doesn’t care much for enforcement. However Los Angeles’ Department of Building and Safety has a new Marshall in town who says he cares. There’s supposed to be a 10-foot set back from the street or sidewalk for front walls, fences and the like.There’s a height limit for perimeter fences and walls of 6 feet.
Why should you care? The 6-foot fence height is designed to allow animals to travel through their habitat to forage for food and water. We live in the middle of their habitat, and should be considerate of our obligations to the local wildlife.
In fact a wildlife conservation concept is circulating whereby residents are being asked to fence what they use, as opposed to fencing what they own. Many locals wrongfully believe that if you don’t “stake your property” — like in the olden days — you may loose title to it. Not so. In fact in modern cities you can only lose property in “adverse possession” situations when your neighbor’s land grab includes a survey and redrawing of taxable property, and your neighbor actually has to pay property taxes on the snatched real estate. All of which is unlikely to happen by mistake.
There is also little known benefit that landowners can take advantage of should they decide to pull back a fence line. Under the I.R.S. Codes you can create a “Qualified Conservation Easement” and get a monster tax write-off.
You can gift land outright, or an easement to land. Say you and your neighbor both offer 5 feet off your backyard. You’re forbidden by law from building on that land anyway, so it’s no big loss. Set more aside if you have a steeply sloped lot. This will create a wildlife corridor where animals can travel to the increasingly scarce resources. Now they have safe passage, maybe they’ll even lay off those roses. The potential tax benefits for doing this are impressive.
Here’s what you need to do.
- Gift it to a 501(c) 3. For most of us that’s the Santa Monica Mountains Conservancy.
- It can be a gift of the land, or just an easement. The rules are the same.
- You can impose some conditions, but the more restrictions you put on the land, the smaller the tax break.
- The gifted property must meet a “conservation purpose.” The wildlife corridor will do the trick.
What do you get in return?
- A tax deduction of 30 percent of the value of the gift based upon your Adjusted Gross Income for the first year.
- If that does not equal the value of the gift you can carry forward the gift deductions for five years.
There’s paperwork involved. You need to file an IRS Form 8283. You also have to have an independent appraiser value the property at “Fair Market Value.” They need to sign the tax form as well.
If you have property you’d like to gift by Will, then the entire value of the real estate is excluded from your taxable estate. This could work out for you and your heirs as well.
Check with your tax advisor as there is a sunset clause in this law.