How Do I Complete an Act of Donation for Land in Louisiana?

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How to Transfer Property As a Gift

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Acquiring a bit of land is a long-standing dream for many people, but others might find they own more property than they have any real need for. In Louisiana, giving away some of your surplus to a friend, relative or charitable organization is a simple matter of completing a form called an Act of Donation and having it notarized. The process is relatively quick and easy, but it does have potential tax implications.

Creating the Documents

Your parish clerk's office should have an Act of Donation template you can use, either in hard-copy form at the office or as a downloadable form on its website. To complete the form, you'll need to have three key pieces of information:

The recipient, or donee, must agree to the transfer of property and sign off on the forms. Under Louisiana law, you'll need to have the signatures notarized, in the presence of two witnesses.

Filing the Documents

Once the documents have been created and notarized, you're ready to file them. Take them to the parish office in the parish where the property is located and the donation is to be filed. In most Louisiana parishes, you won't be required pay any fee to complete the donation. The exception is city of New Orleans, which has a documentary transaction tax that is a flat fee of about $325 for most properties.

The Gift Tax

Some people might give property to relatives in the hopes of avoiding paying inheritance taxes at some point in the future, but these donations could be subject to a gift tax. Gifts below a set dollar value, or threshold, are exempt from this tax. The Internal Revenue Service sets that threshold for each taxation year. In 2017, the level was $14,000. If you donate a property worth more than the threshold, you may be liable for taxes on the balance. If you owned the property jointly with a spouse, you're each entitled to make a gift in that amount, so you could give away a piece of land worth up to $28,000 without being liable for the gift tax.

You May Have a Tax Benefit

Sometimes, the shoe is on the other foot, and donating a parcel of land can result in a tax benefit. This is the case when you donate land as a gift in kind to a registered charity, or in some cases if you donate it to a recognized conservation trust. If you're planning a charitable donation of land, take time to read through the IRS's documentation on the subject. If your taxes are complicated, and you usually have them prepared by a professional, talk to your tax preparer ahead of time to make sure you understand the requirements and potential benefits or liabilities.