Did you know that your home, vacation property or land has a significant value for charitable giving?
In addition to getting the maximum tax deduction allowed by law based on the property’s fair market value, you avoid capital gains tax and future estate taxes.
As the real estate market grows, many San Diegans are utilizing this unique form of philanthropy to increase their charitable giving while maximizing their impact on their community through the support of local nonprofit organizations.
Gifting real estate is a strategic, win-win opportunity that is one of the most effective ways to give back and help others.
Gifts of real estate allow you to receive multiple tax benefits. In addition to getting the maximum tax deduction allowed by law based on the property’s fair market value, you avoid capital gains tax and future estate taxes.
The process is also more accessible than you think.
Valuing Your Property
Your deduction amount generally depends on whether the real estate has been in your hands for less than one year (short-term) or more than one year (long-term).
- For short-term assets, the deduction is equal to the lesser of the property’s fair market value or its cost basis.
- For long-term appreciated assets, the gift qualifies for a deduction equal to the property’s fair market value.
However, depending on the type of real estate you want to give, there are important things to know. For example, how you structure your gift will determine what type of deduction you receive. It may also make sense for you to make a gift to a Charitable Remainder Trust, which allows you to receive additional benefits and income for life.
Every situation is unique and San Diego Foundation (SDF) works with you to evaluate all your options and determine the need for marketability evaluations, disclosures, evidence of title and other necessary assessments or investigations.
Managing the Process
Working with your professional advisor, The San Diego Foundation evaluates the best timing of the gift and the form of giving that will maximize your financial and charitable goals.
Once an appraiser assesses the value of the property, we then visit the site before accepting the property and its title. At that point, SDF will market and manage the property during the sale process to seek the best possible price.
After the property is sold, the funds are transferred to your fund at SDF, and you can begin supporting the nonprofit organizations and causes you care about most.
Start the Conversation
While gifts of real estate can be more complex and less liquid than conventional assets that donors give, working with a community foundation alleviates many of the challenges for you, the donor.
San Diego Foundation’s team of experts work with your professional advisor to manage the process so you can focus on the joyful part of philanthropy – the impact.
Contact us today at donorservices@sdfoundation.org to start the conversation about gifting real estate.
