Real estate donations have been slow to emerge in the United States. But with rising property value, combined with ways to maximize one's tax deductions, real estate is now a good option for philanthropists who want to help their favorite charity.
Types
One's home is only one of the pieces of real estate that can be giving to charity. If a person owns vacant land, apartment buildings or condominiums, commercial or industrial property, it can be given to charity. Even time shares or property that currently is mortgaged or has a lean can, in many cases, be considered as a donation.
Significance
Over $200 billion was donated to charities in the United States in 2007, but only a small percentage was represented by gifts of real estate. Considering that real estate now represents almost 30 percent of the assets of a typical household, real estate donations have only just begun to make an impact on charitable giving.
Benefits
Individuals can avoid some or all capital gains on the property, receive a tax deduction for the gift, remove problems of selling the property and can have an uncomplicated method of transferring the property. They can even create income from an annuity while avoiding all real estate fees and taxes.
Misconceptions
Many people avoid giving real estate to charity because they believe that their deduction is based on what they paid for the real estate. On the contrary, their deduction will be current value of the property being donated. A simple appraisal is all that is needed to establish that value, and in many cases people will receive a tax deduction based on that figure.
Potential
Until recently, many charities have shied away from accepting donations of real estate, because their staff did not have the expertise or the time to deal with concerns about liability, environmental impact, liens and mortgages. Since real estate looms as a major force in charitable gifts in the future, acceptance has grown substantially over that past several years.
Tags: property, charities, real estate, deduction based, donations have, estate donations, estate donations have, many cases, real estate, receive deduction, their deduction, United States
