Contribute Real Estate
Donate real estate and support many causes. Contributing real estate provides a great opportunity to fund your donor-advised fund while also supporting your favorite charities over time.
Many donors have appreciated assets in the form of real estate (raw land, investment property, commercial real estate, vacation homes, etc.). Real estate that has been held for a long period of time has the potential to create significant capital gains taxes when sold.
Many real estate investors have navigated capital gains (also called a Section 1031 Exchange) and now find that they want to sell and/or support their favorite charities. By contributing real estate to your fund, you may take a full and fair market value income tax deduction for the donation while eliminating capital gains tax liability on the appreciated value of the property.
In comparison, real estate contributions to a private foundation would generally be deductible at the lower of the cost basis or market value.
Real estate interests are generally appropriate as contributions to iGiftFund when a sale is intended to convert the illiquid interest into cash. It makes the most sense to donate real estate that meets the following criteria:
- The property has been held for more than a year and has appreciated significantly.
- The property is marketable, and relatively easy and cost-effective to liquidate.
- The property is debt-free.
iGiftFund will work with your trusted real estate professional on the sale of the property.
Donate Real Estate – Special Considerations:
If a sale is expected, the terms of the sale should still be under negotiation. The documentation must not have proceeded to the point at which the IRS would consider it a prearranged sale. Such a scenario could potentially result in a tax liability for any gain on the sale.
Donors often have special considerations with real estate assets. We recommend calling us to discuss said situation in advance.
Note: This information is provided for informational purposes only, and should not be interpreted as legal and/or tax advice. Donors should always consult their legal and tax advisors regarding their specific situations.