Real Estate
If you own a piece of real property you are no longer using on a regular basis or perhaps have been trying to sell, and you have been considering a charitable gift to Boys and Girls Homes, using this asset to fund the gift can have significant benefits.
Even with the volatility of the real estate market, if you were to sell property that you have owned for a number of years, it is likely that you would owe significant capital gains tax. If you use the property to fund a charitable gift, you will avoid the tax on the increase in value and in most cases will receive a charitable income tax deduction for the full market value of the property, not just the original purchase price.
If the real estate market has hit you particularly hard and you own property that has decreased in value, you many want to use a different strategy. If you donate the property, you will only be able to deduct the fair market value of the property - which is less than what you paid for it. It may be wise to sell the property and make a gift of the cash proceeds from the sale. You will be able to deduct a capital loss from the property as well as a deduction from the charitable gift of cash. The net result can be deductions that are actually worth more than the property.
Real Estate gifts can also provide funding for a life income gift or can be used to establish a Retained Life Estate.
The value of your real estate can be used to fund a Charitable Remainder Trust which will provide income to you for life, or for a term of years, with the remainder ultimately coming to support our program of care at Boys and Girls Homes. Depending on the value of the property and your age at the time of the gift, the CRT will make an annual payment to you or to someone you designate. You will also be eligible for a tax deduction as a charitable donation in the year in which the gift is made. It would be wise to establish the trust so that only the net income from the value of the CRT is disbursed until the property is sold and the CRT fully funded.
