Phil Hanson Truman Heartland Community Foundation
Although real estate is usually the most important asset that an individual owns, it is often overlooked as a means of giving. The process can be a little complicated, but donating a property is a very tax-savvy way to contribute to your favorite charity.
If you’ve owned property for at least one year, have a clear title and don’t have environmental issues, your appraised property may be donated to a qualified 501(c) 3 nonprofit. Whether it’s a family home, farmland, or other real estate investment, You get a deduction equal to the fair market value of the property, and you will avoid paying any capital gains tax as well. The charity receives the full value of your gift, and pays absolutely no taxes. Any real estate donation valued at more than $5,000 will need a qualified appraisal to secure your deduction, and all standard annual deduction limits will still apply.
There are many reasons why a person might want to donate all or part of their real estate to charity. Donating property makes sense for people who have seen their property appreciate while seeing a decrease in depreciation deductions. Since the donor can deduct the fair market value of the property donation, the charitable deduction can be significant. Individuals may also want to donate property if they sell other property or anticipate a significant tax increase; Deduction for real estate donations may help offset these federal taxes. You may have received the property as a gift from a parent or relative but do not have the time, energy, or desire to take care of it. Turning unwanted property into a charitable gift is a smart alternative.
Donating a property is not a particularly easy process and requires some special expertise, but many nonprofit organizations are well equipped to accept this type of donation. Another option is to donate your estate to a community organization and create your own donor fund, earmarked fund, or interest fund. It’s like owning your own family business without any hassle. You can decide when, where and how much you want to donate to your favorite charities throughout the year but get a tax deduction in the year you donated property to create your fund.
With 40 years of charitable giving experience, the Truman Heartland Community Foundation is a trusted partner for hundreds of donors in Eastern Jackson County. When you donate your property to the foundation, you can rest assured that your real estate donation is in good hands. Talk to your financial advisor about your non-cash asset contributions and learn how you can be tax wise while giving back.
Phil Hanson is president and CEO of the Truman Heartland Community Foundation, a 501(c)3 public charity committed to improving communities in and around Jackson County through collaboration with community members and donors. For more information on charitable giving, visit www.thcf.org, email [email protected], or call (816) 836.8189.
