Real Estate Gifts
Goal: Avoid capital gains tax on the
sale of a home or other real estate
Depending on the circumstances that are involved, gifts of real estate can be an effective means of planning a gift. Much of the individual wealth in America is invested in real estate. While the first thought often is a home or farm, real estate also can involve a vacation or second home, an apartment or commercial building, a shopping center, or undeveloped land. Often our real estate holdings, be it our house, a second home or investment property, is a significant part of our net worth. Gifts of real estate, therefore, can enable us to make significant contributions.
Each piece of property and its unique circumstances need to be reviewed to determine the suitability of the property as a gift. Generally speaking, a rule of thumb is that an acceptable piece of property is one that can be readily sold. Also, there are many ways to donate property. It can be an outright gift, a retained life estate, or placed in a trust, such as a charitable remainder trust.
In addition to making a significant contribution, there can be other benefits for you: There may be a charitable income tax deduction that would lower your income tax. If your property has appreciated in value since you acquired it, there might be a large capital gain tax that would result if you sold it. By donating the property, you may be able to avoid realizing the capital gains. Depending on your state regulations, you may be able to turn the property into a gift that is structured to provide income for you and other beneficiaries. If the property is your home or farm, you may be able to make a gift of it now and continue to live in it for the rest of your life and receive tax benefits the year of the gift. If the contribution from your property exceeds the allowable charitable deduction limits, the deduction may be carried forward for five years. There can be significant advantages to using property as a charitable gift.
In any case, while we discuss some generalities here about donating real estate, if you are considering such a gift to McLeod Health Foundation, please contact us to discuss its suitability and your unique circumstances.
For more information or a confidential discussion of your charitable options, please email or call the Development Officer, Roxanna Tinsley, at (843) 777-2694.