A charitable gift of real estate is an opportunity to make what could be your largest charitable donation ever. Donating an asset that may otherwise be a burden to remaining family members could also provide special tax-saving benefits.
Some information to consider on real estate gifts:
- You may earn an income tax charitable deduction, and avoid capital gain tax liability.
- A special opportunity exists to leave a house or farm to HLA in the future, at your death, and yet receive an income tax charitable deduction now for a large portion of the property’s value.
- It may be possible to give the real estate and receive a regular income for life.
- The real estate gift might otherwise have been a management and disposal headache for you or your loved ones.
- If you have income-producing real estate you would like to pass on to heirs (or a combination of real estate and a liquid asset), you may be able to pass the real estate to heirs with a significant deduction (sometimes elimination) of gift taxes, through a Charitable Lead Trust. The real estate and any growth in value may pass to heirs estate-tax free.
- If you, or your business, have income-producing real estate and wish to hold it for long-term growth, you may place the real estate in a Grantor Charitable Lead Trust, and have the income go to HLA for a period of years, earn a large charitable income tax deduction (but pay tax on income as it is received), and then receive the property back at the end of the chosen period.