Gifts of Real Estate: Getting Started
Imagine avoiding the hassle of selling a piece of property, with no worry about getting a fair price and at the same time realizing valuable income and estate tax deductions. This can be your reality when you consider using real estate to make a charitable gift to PETA. Here’s what you need to know.
How It Works
You can donate your property outright, place it in a trust or give it through your will. All of these methods will enable you to enjoy personal financial benefits while supporting our work in a meaningful way. Following are details on the most straightforward way to make such a gift: direct donation of your property.
How You Benefit
In addition to freeing you from the costs and responsibilities of ownership, making an outright gift of property that you’ve owned for more than a year offers these benefits:
- You obtain an income tax charitable deduction equal to the property’s full fair market value. This deduction reduces the cost of making your gift and frees cash that otherwise would have been used to pay taxes.
- You eliminate capital gains tax on the property’s appreciation.
- The transfer isn’t subject to the gift tax, and the gift reduces your future taxable estate.
Compare the Benefits of Donating Real Estate vs. Cash
|Give $300,000 in Real Estate||Give $300,000 in Cash|
|1.||Fair market value of gift||$300,000||$300,000|
|Ordinary income tax benefits|
|3.||Ordinary income tax savings1
($300,000 x 35%)
|Capital gains tax benefits|
|4.||Cost basis in property||$50,000||$300,000|
|5.||Long-term capital gain||$250,000||0|
|6.||Capital gains tax savings1
($250,000 x 15%)
|7.||Total tax savings (line 3 + 6)||$142,500||$105,000|
|8.||Net cost of gift (line 1 – 7)||$157,500||$195,000|
|Advantage of donating real estate over cash||$37,500|
|Request a free guide to learn more about the tax benefits of a gift of real estate.|
Please contact Tim Enstice at 757-962-8213 or email@example.com if you have any questions about this way of leaving a leaving a legacy for animals.
1Assumes a 35 percent marginal income tax bracket and a 15 percent long-term capital gains tax bracket.