Advantages of Giving Real Estate

You have many options as to what you contribute when you make charitable gifts.  You can give cash, stocks, bonds, collectibles, land, buildings or virtually anything of value.  The choice of what property to contribute depends on your personal goals and circumstances.  However, in making this choice, you should be aware of the special incentives Congress has created to encourage certain forms of private philanthropy, especially gifts of real estate.   Benefits of giving real estate may include:

• Reduced income taxes
• Reduced estate taxes
• Reduced property taxes
• Lower insurance and upkeep costs
• Avoidance of capital gains taxes
• Financial security for loved ones
• Increased lifetime income
• Continued use of the contributed property during your life

An immediate gift of appreciated real estate can generate income tax benefits that will substantially reduce the after-tax cost of the gift.  Generally, a person who makes a gift of real estate held for more than one year is entitled to an income tax deduction equal to the full value of the property contributed.  In addition, the donor escapes capital gains tax on the profit that would have been taxable if the property had been sold.  The donor may also save estate taxes because a lifetime gift of real estate removes the property from estate tax.

Copyright © 2009 by R&R Newkirk. All rights reserved.

<Back