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Gifts of
Real Estate

Detailed gift description

When it comes to charitable giving, there are plentiful opportunities. However, giving that haystack – or other marketable real estate – may be just the good fortune you are seeking.

Gifts of real estate can be very advantageous, frequently allowing you to save thousands of dollars in income or estate taxes. We are happy to consider gifts of residential, commercial and undeveloped real estate. As with donations of other types of appreciated property, gifts of real estate secure a charitable income tax deduction for you, based on the fair market value of the property, with no capital gains liability for the transfer to us.

Why should I consider a gift of real estate?

If the property you are contributing is a long-term capital asset (this is held for over one year), you receive a charitable income tax deduction for the appraised value. The charitable income tax deduction may be applied for up to 30 percent of your adjusted gross income; otherwise the deduction is carried forward for up to five more years. Furthermore, you are freed from paying real estate taxes, maintenance costs, insurance, and capital gains taxes on the property’s appreciation. In addition, you also avoid capital gains taxes on the transfer, and you remove the asset from your estate for estate tax purposes.

When is the best time to contribute real estate?

Gifts of real estate may be made outright or through your estate. If it is included in your Will, the charitable deduction could be used to offset other estate taxes.

What if I’m still using my real estate?

One option people often overlook is the opportunity is to irrevocably deed a residence (such as your home, cabin, or farm) to Advocate Charitable Foundation but reserve the right the use it during your lifetime. An immediate income tax deduction and a federal estate tax deduction are allowed for this arrangement. Click here to read more about retained life estates.

What if I enjoy the income my real estate provides?

You can use your real estate to make a gift and retain income. A charitable remainder unitrust, for example, allows you to make a gift while retaining a variable income for life or a specified period of time. Through its use, it’s possible for appreciated real estate to be sold and reinvested with reduced or eliminated capital gains tax. The entire value of the contributed asset is then available to experience greater earnings than you might otherwise achieve. Click here for more information about unitrusts.

Another option is a bargain sale. In this case, we may consider purchasing the property from you for a price lower than its appraised value. We receive the property and you receive income to reinvest. Click here for more information about bargain sales.

What we need from you.

We will gratefully review your gift offer and evaluate the condition and marketability of the proposed real estate, reserving the final say on acceptance.

• You will need to obtain a title policy and independent appraisal.
  
• Our advisors will inspect the property and complete an environmental checklist and evaluation on all gifts of vacant land and residential property. We will then discuss with you the need to conduct a phase one environmental study.
  
• Second, the IRS requires donors of real estate to secure an independent appraisal to establish the fair market value of the property. We can assist you in following the IRS procedures for this appraisal.
  

For more information

Email us, complete the personal illustration form, or call us at 847-384-3435 so that we can assist you through every step of the process.