McHenry County Farm Bureau
1102 McConnell Road
PO Box 1530,
Woodstock, IL 60098
8 15.338.1520
http://www.conserveMC.org

Land Conservancy of McHenry County
PO Box 352
Woodstock, IL 60098
815.455.4618
http://www.conserveMC.org

McHenry County Soil & Water Conservation District
1143 N Seminary
Woodstock, IL 60098
815.338.0099 x3
http://www.mchenryswcd.org

McHenry County Conservation District
18410 US Highway 14
Woodstock, IL 60098
815.338.6223
http://www.mccdistrict.org

McHenry County Defenders, 124 Cass
Suite 3, Woodstock, IL 60098
815.338.0393
http://www.mcdef.org

Openlands Project
25 E Washington
Suite1600
Chicago, IL 60602
312-427-4256
http://www.openlands.org

Frequently Asked Questions

What is a farmland preservation program?

First, it is a voluntary program. Typically, a local not-for-profit organization or unit of government establishes a program to purchase and hold development rights from willing landowners. Landowners then agree to sell (or donate) their development rights, but maintain ownership of the land.

What is a development right?

There are a bundle of rights that can be separated from a property and sold from that property without selling the property itself – mineral rights being the most commonly understood. “Development rights” – the rights to subdivide or develop a property – can also be sold from that property. In the case of agricultural land, a farmer can sell his development rights – the value of which is usually the difference between the development potential and its value as farmland.

How long does an agriculture easement last?

Forever.

Has this been done anywhere else?

Yes. There are over 1 million acres of crop and ranch land protected through such programs in the United States. Kane County, Illinois, has a program with a waiting list of landowners who want to preserve their land for agricultural production.

Are there tax implications to consider?

Yes. Here are a couple of examples:
- 1031 Exchange. The money a landowner receives from selling the development rights is subject to capital gains tax. However, the family can defer that tax through an IRS device called a “like-kind exchange,” which allows the farmer to reinvest the proceeds of the sale into another enterprise (for instance, purchasing additional farmland).
- Bargain sale. If the development rights are sold at a price below fair market value, the value of the difference can be deducted as a charitable donation on the federal tax return. This can be used to off-set capital gains taxes that the landowner may otherwise be subject to as a result of the sale.

What about property tax implications?

If the land is currently assessed at farmland values, then there will not be any change to the assessment. If the land is assessed at development value, then it should be reduced to a farmland assessment.

Where will the money come from?

A local funding source has not yet been identified. However, once a local program is in place, the county program will be eligible to participate in the federal matching program which provides up to 50% of the funds to purchase development rights on qualified farmland. Kane County has already received over $4 million in matching federal dollars for their program. Kane is currently the only Illinois county with a program.

How do I get more information?

Contact the Mchenry County Farm Bureau at (815) 338-1520.