Outright Gift of Real Estate
Transforming Realty to Gift Reality
Real estate is a thoughtful way to secure the future of Albion College without touching your bank account. When you give Albion College appreciated property you have held longer than one year, you qualify for a federal income tax charitable deduction. This eliminates capital gains tax. And you no longer have to deal with that property's maintenance costs, property taxes, or insurance.
Another benefit: You don't have to hassle with selling the real estate. You can deed the property directly to Albion College or ask your attorney to add a few sentences in your will or trust agreement.
Ways to Give Real Estate
You can give real estate to Albion College in the following ways:
When you make a gift today of real estate you have owned longer than one year, you qualify for a federal income tax charitable deduction equal to the property's full fair market value. This deduction lets you reduce the cost of making the gift and frees cash that otherwise would have been used to pay taxes. By donating the property to us, you also eliminate capital gains tax on its appreciation.
A gift of real estate through your will or living trust allows you make a larger gift than you could during your lifetime while having the flexibility to change your mind at any time. In as little as one sentence or two, you can ensure that your support for Albion College continues after your lifetime.
Perhaps you like the tax advantages a gift of real estate to Albion College would offer, but you want to continue living in your personal residence for your lifetime. You can transfer your personal residence or farm to Albion College but keep the right to occupy (or rent out) the home for the rest of your life. You continue to pay real estate taxes, maintenance fees, and insurance on the property. Even though we would not actually take possession of the residence until after your lifetime, since your gift cannot be revoked, you qualify for a federal income tax charitable deduction for a portion of your home's value.
Are you tired of the hassles of maintaining your property such as paying taxes, utilities, and repair bills? Consider donating the property to Albion College in exchange for reliable payments for life for you (and someone else, if you choose). When you arrange a charitable gift annuity, you receive a federal income tax charitable deduction in the year you set up the gift annuity when you itemize on your taxes. If you use appreciated real estate to make a gift, you can usually eliminate capital gains tax on a portion of the gift and spread the rest of the gain over your life expectancy. A gift of unmortgaged property to fund a deferred gift annuity is preferable and generates the greatest tax benefit.
Want to make a gift that gives you a lump sum of cash and a charitable deduction (when you itemize) at the same time? Sell us your property for less than the fair market value. When you make a "bargain sale", you sell your property to Albion College for less than what it's worth. The difference between the actual value and the sale price is considered a gift to us. A bargain sale can be an effective way to dispose of property that has increased in value.
You can contribute any type of appreciated real estate you've owned for more than one year, provided it's unmortgaged, in exchange for an income stream for life or a term of up to 20 years. The donated property may be a residence (a personal residence must be vacant upon contribution), undeveloped land, a farm, or commercial property. Real estate works well with only certain variations of charitable remainder trusts. Your estate planning attorney, who will draft your trust, can give you more details.
This gift can be a wonderful way for you to benefit Albion College and simultaneously transfer appreciated real estate to your family tax-free. You should consider funding the charitable lead trust with real estate that is income-producing and expected to increase in value over the term of the trust.
A gift of real estate may be a perfect way to honor your loved one in perpetuity. When you make an endowed gift of real estate, your contribution is invested with and becomes part of our endowment. An annual distribution is made for the purpose you designate, such scholarships or faculty support. Because the principal remains intact, the fund will generate support in perpetuity.
When you transfer real estate to your donor advised fund, you avoid capital gains taxes and qualify for a federal income tax deduction based on the fair market value of the property when you itemize your taxes.
Your payments depend on your age at the time of the donation. If you are younger than 60, we recommend that you learn more about your options and download this FREE guide Plan for Retirement With a Deferred Gift Annuity.
- Contact Steve Oursler, CEP at 517/629-0897 or email@example.com to discuss the possibility of giving real estate to Albion College.
- Seek the advice of your financial or legal advisor to make sure this gift fits your goals.
- If you include Albion College in your plans, please use our legal name and federal tax ID.
Legal Name: Albion College
Address: 611 East Porter Street, Albion, MI 49224
Federal Tax ID Number: Please contact us for our federal tax ID number.
An Example of How It Works
Janet purchased a rental property years ago and has watched it grow steadily in value. Still active in her career and traveling frequently, she's beginning to find management of the property more and more of a hassle. At this stage of her life, Janet has decided to move to a 55+ condominium development, where all exterior maintenance is provided and she doesn't have to worry about security issues. Janet sees this as an opportunity to give her rental property to a charity that's important to her while realizing valuable tax benefits.
Janet avoids capital gains tax on the appreciation and qualifies for a federal income tax charitable deduction of $250,000, which is for the property's fair market value today. She is able to claim 30 percent of her $200,000 adjusted gross income, or $60,000, in the year of the gift. In the five years following, she can continue to use up the remaining $190,000 deduction. Janet is happy in her new condo and loves knowing that the gift of her property will make a big difference supporting our mission.