When the burden of property ownership outweighs the benefits, it might make sense to opt for a change: Sell the house, unload the vacation home or put your office building on the market. Before you make a move, however, consider the possibilities a charitable donation of real estate brings. Here's a hypothetical example.
How It Works
Janet purchased her home years ago and has watched it grow steadily in value. Still active in her career and traveling frequently, she's beginning to find home ownership 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 existing house to a charity that's important to her while realizing valuable tax benefits.
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The Tax Benefits
Janet receives an income tax charitable deduction of $250,000, which is for her home'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 uses her deduction over time because the deduction for a gift of appreciated real estate in any year is generally limited to 30 percent of a person's adjusted gross income, with a five-year carryover of the unused deduction.
We Can Help
To learn more about supporting University of Wisconsin - La Crosse Foundation today with a gift of real estate, contact Al Trapp or Pat Stephens at 608-785-8496 or 608-785-8153 or firstname.lastname@example.org.
Your Next Steps
Getting Started | Is This Gift Right for You? | Case Study | How to Complete Your Gift | Beyond an Outright Gift | Action Items
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The information on this website is not intended as legal or tax advice. For legal or tax advice, please consult an attorney. Figures cited in examples are for hypothetical purposes only and are subject to change. References to estate and income taxes apply to federal taxes only. State income/estate taxes or state law may impact your results.
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