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Gifts of Real Estate
When appreciated real estate is given to us, capital gains taxes can be completely avoided and the full fair market value of the property is generally deductible as a charitable contribution.
Gift of a Remainder Interest in a Personal Residence or Farm
A special provision of the tax law allows an immediate income tax charitable deduction for a gift of a remainder interest in your home or farm. With a remainder interest gift, you retain an absolute right to occupy the home or farm for your life (or the life of a family member). The property passes to us only after termination of the life estate(s).
The charitable deduction allowable for this future gift is the present value of our right to receive the property at some later date. The age of the life tenant is the primary factor in determining the present value of our deferred interest and the charitable deduction. The gift is deductible in the year of the transfer (subject to income limitations).
Gift of a Fractional Interest in Real Estate
Federal tax laws let donors take a charitable deduction for gifts of fractional interests in real estate. This type of gift can be especially rewarding when you own a vacation home that you use only part of the year.
Example: Mary and Jim own a $300,000 vacation home that they use for only two months of the year. They can give the Museum a 50% interest in the property, secure a tax deduction for the value of our interest in the property, and still have a right to use and occupy the property for up to half the year.
Gift of Commercial or Rental Real Estate:
Individuals can make a gift of commercial or rental real estate to the Museum and avoid all capital gains taxation on any appreciation. In addition, donors can retain the lifetime right to receive income from their gift and they benefit from a current charitable contribution deduction. This is accomplished best with the use of a Charitable Remainder Trust. The Museum has the ability to provide illustrations of various kinds that demonstrate how this concept works. If you would like to know more about this strategy, please call our Planned Giving Center.
