Seven Ways to Donate Real Estate

Think Twice Before You Put Out the For Sale Sign

Consider a Gift of Real Estate

Imagine avoiding the hassle of selling a piece of property, with no worry about getting a fair price, and at the same time qualifying for a federal income tax charitable deduction. This can be your reality when you consider using real estate to make a gift to our organization. A gift of real estate can be completed in a variety of ways. Here are some examples:

1. Make a Gift Today

In addition to freeing you from the costs and responsibilities of ownership, making an outright gift of property that you've owned for more than a year offers these benefits:

You qualify for an income tax charitable deduction equal to the property's fair market value. This deduction reduces the cost of making your gift and frees cash that otherwise would have been used to pay taxes.
- fair market value — the price that a willing buyer and a willing seller can agree on
You eliminate capital gains tax on the property's appreciation.
- capital gain — the increase in value of an asset since its original purchase
The gift reduces your future estate administration costs.

Example: Matteo gives us a vacation cottage she no longer uses. It originally cost $50,000 but is now worth $150,000.She gets a $150,000 federal income tax charitable deduction, which represents a tax savings of $48,000 in her 32 percent tax bracket, and she completely eliminates tax on the $100,000 of appreciation. Now she no longer has to maintain the cottage. In addition, the property is removed from her estate, reducing her future estate administration expenses.

2. Give Real Estate Through Your Will or Living Trust

If you are not comfortable making an irrevocable gift of property right now, consider leaving it to us in your will or revocable living trust. This can be the perfect way to support our organization because you are able to help us in the future without using assets today.

A gift in your will or living trust can be created or changed at any time. It allows you to continue ownership, enjoy your property during your lifetime and create a lasting legacy in your memory or in memory of a loved one.

irrevocable — cannot be changed or canceled
revocable — able to be changed or canceled

3. Donate Your Home, but Keep Living There

Many of our supporters can't imagine living anywhere else but their current homes. Many would also love to make a significant gift to us but don't have the means to make such a gift today. If this sounds like you, you may want to consider a charitable giving arrangement called a retained life estate.

With a retained life estate, you deed a personal residence or farm to us now. You retain the right to occupy the home for life and continue to pay real estate taxes, maintenance fees and insurance on the property. In addition, you can later decide to rent your home or make improvements to it. After your lifetime—and the lifetime of your spouse or another person you choose to retain rights to live in the home—we take possession of the property.

4. Create a Charitable Gift Annuity With Property

If you are tired of the hassles of maintaining your property such as paying taxes, utilities and repair bills or have non-income producing property you may wish to consider donating the property to us in exchange for a charitable gift annuity. A charitable gift annuity involves a simple contract between you and us where you agree to make a gift and we, in return, agree to pay you (and someone else, if you choose) a fixed amount each year for the rest of your life. In addition to providing a gift to us and receiving fixed payments for life, you also receive these benefits:

Your initial gift is partially income tax-deductible when you itemize.
Your charitable gift annuity payments are partially income tax-free throughout your estimated life expectancy.
Your payments are not affected by ups and downs in the economy.
The gift annuity can be for one or two people, so your spouse or another loved one can also receive payments for life.
If you use appreciated real estate to make a gift, you can usually eliminate capital gains tax on a portion of the gift and spread the rest of the gain over your life expectancy.

If you are thinking about funding a charitable gift annuity, a gift of unmortgaged property to fund a deterred gift annuity generates the greatest tax benefit.

5. Make a Bargain Sale

A bargain sale occurs when you sell real estate that you've owned for more than one year to us for less than its current fair market value, subject to our agreement. After we purchase your property: 1) You receive a cash payment from us for the sale price, 2) you qualify for a charitable deduction for the difference between the sale price and the higher fair market value, and 3) we receive the property at a bargain price. You benefit financially, and so do we.

6. Use Property to Fund a FLIP Charitable Remainder Unitrust

Another approach is to use your property to fund what's known as a FLIP charitable remainder unitrust. Such a trust can be set up to make lifetime payments to you or any other recipient you name after the property is sold. At your death, our organization receives the balance (remainder) in the trust.

Donating property to a charitable remainder trust may provide you with a number of potential benefits:

Eliminate up-front capital gains tax on the increase in the property's value since you bought it.
Receive an income tax deduction for the value of the remainder interest, when you itemize.
Receive income from the trust for the rest of your life once the property is sold.
Reduce the cost of probate-the legal process of administering your estate after your death-by eliminating the property from your estate.
Relieve yourself of selling or maintaining your property.
Make a significant gift that we can access after your lifetime.

7. Establish a memorial and endowment gift

A gift of real estate is a perfect way to honor your loved one through a memorial or endowment type gift. If you have a family member or friend whose life has been touched by us, we hope you'll consider making a gift to us in honor of that person. Providing a gift establishes a living tribute that allows you to:

Honor a loved one or yourself
Receive a federal income tax charitable deduction, when you itemize
Reduce or eliminate capital gains tax

When you make an endowed gift, your contribution is invested with and becomes part of our endowment. An annual distribution is made for the purpose you designate. Because the principal remains intact, the fund will generate support in perpetuity. Your real estate gift can fund an endowment you create. Or, you can contribute to our organization's already established endowment.

Why Donate Real Estate? Depending on the method you choose, a gift of real estate to our organization may allow you to:

Receive an income tax charitable deduction.
Reduce or eliminate capital gains tax.
Pay no gift tax on the transfer.
Reduce your estate administration expenses.
Relieve the responsibilities and costs of upkeep.

Get Started

Contact us today for more information about using real estate to support our organization. We would be happy to assist your attorney and other advisors in designing the most suitable plan for you.

Cahill Zoeller, Executive Director

Phone: (609) 240-3700
Email: cahill.zoeller@friendsofbocconi.org
555 Madison Avenue, 11th floor
New York, NY 10022

The information on this website is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor. Figures cited in examples are for illustrative purposes only. References to tax rates include federal taxes only and are subject to change. State law may further impact your individual results.