Real Estate
In certain situations, your client may make a gift of residential, commercial, agricultural, or undeveloped real estate to the Community Foundation.
- A gift of real estate allows your client to make an extraordinary gift, while transferring the burden and expense of managing the property to another party. This type of gift also removes a large asset from your client’s taxable estate.
- A gift of real estate can be made outright or can fund a life income arrangement
Gifts of real estate example:
- Client profile:
- Lorraine volunteers at her local library and regularly attends the symphony with her granddaughter.
- Lorraine owns a beach house that she rarely uses. She is tired of dealing with the maintenance, taxes and insurance costs associated with this property. She wants to sell the property but is worried about the capital gains tax associated with such a sale.
- Client opportunity:
- Lorraine donates the beach house property to the Community Foundation. She receives an income tax deduction (up to 30% of her AGI) for the FMV of the property. Because this is a donation, not a sale, Lorraine does not pay capital gains tax on the property.
- The Community Foundation sells the property, but does not pay capital gains tax because it is a 501©3 nonprofit charity.
- The proceeds of this sale are invested in the Community Foundation’s investment pool and used to create a donor advised fund held at the Community Foundation.
- Lorraine uses the fund to make grants to both the symphony and the library every year.
Please contact Elena for further details about this type of gift.
Gifts of real estate received by the Community Foundation are subject to the approval of the Community Foundation’s Board.