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Donating appreciated real estate, such as a home, vacation property, undeveloped land, farmland, ranch or commercial property can make a great charitable gift to support the causes you care most about by setting up a fund with CommunityGiving or one of our partner foundations.
Gifts of Real Estate
Benefits of gifts of real estate
- Avoid paying capital gains tax on the sale of the real estate
- Receive a charitable income tax deduction based on the value of the gift
- Leave a lasting legacy and support the causes you care about most
How to make a gift of real estate
Real property may be given to CommunityGiving by executing or signing a deed transferring ownership. You may deed part or all of your real property to CommunityGiving or a planned giving vehicle. Your gift will generally be based on the property's fair market value, which must be established by an independent appraisal. Here are some ways real estate may be gifted:
- An Outright Gift - When you make a gift of real estate you have owned longer than one year, you qualify for a federal income tax charitable deduction equal to the property's full fair market value. This deduction lets you reduce the cost of making the gift and frees cash that otherwise would have been used to pay taxes. By donating the property to us, you also eliminate capital gains tax on its appreciation.
- A Gift in Your Will or Living Trust - In as little as one sentence or two, you can ensure that your support of the organizations you care most about can be continued into perpetuity. A gift of real estate in your will or trust allows you the flexibility to change your mind.
- A Retained Life Estate - Perhaps the tax advantages of a gift of real estate are appealing to you but you want to continue using the property during your lifetime. You can transfer the property to CommunityGiving but keep the right to occupy the property. You continue to pay real estate taxes, maintenance and insurance. Because your gift would be irrevocable, you would quality for the federal income tax charitable deduction for a portion of your home's value.
- A Bargain Sale - Selling your property to our organization at less than fair market value is called "a bargain sale". The difference between the actual value and the sale price is considered a gift to us. This type of real estate gift can be a useful way to dispose of property that has increased in value, and it is the only gift vehicle that can give you a lump sum of cash and a charitable deduction (when you itemize) at the same time.
- A Charitable Remainder Trust - Real estate works well with only certain variations of charitable remainder trusts. You can contribute any type of appreciated real estate you've owned for more than one year, provided it's unmortgaged, in exchange for an income stream for life or a term of up to 20 years. The donated property may be a residence (a personal residence must be vacant upon contribution), undeveloped land, a farm or commercial property. Your estate planning attorney, who will draft your trust, can give you more details.
- A Charitable Lead Trust - You could consider funding a charitable lead trust with real estate that is income-producing and expected to increase in value over the term of the trust. It's a great way to transfer appreciated real estate to your family and benefit the causes you care about most.
- A Donor Advised Fund - Using a gift of real estate to establish a donor advised fund is something that intrigues many individuals. By gifting real estate, you avoid capital gains taxes and qualify for a federal income tax deduction based on the fair market value of the property when you itemize on your taxes.
If you have any questions about gifts of real estate, please contact us. We would be happy to assist you and answer any questions that you have.
Mortgaged Property - Please contact us if the property you wish to give has existing debt or a mortgage. Indebtedness can affect your charitable tax deduction.
Difficult Property Gifts - Certain properties pose challenges. We have adopted policies to limit the acceptance of certain kinds of real estate. Please check with us before making a gift of real estate so we can explain our gift acceptance policies.
Capital Gains Tax - Check with us on the capital gains tax implications of your gift. You may also be interested in life income options.