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Gifts of Real Estate

Gifts of Real Estate

Commercial Real estate, such as apartments, buildings, or a private home can be given out-right to a parish. The giver usually will receive a federal income-tax deduction for the present fair market value, thus saving capital – gains tax. Tax counsel can provide other details.


For example Sandee Andrew, 68, had been a farmer for most of his life. The income from his savings and a rental property would provide adequate retirement income. Over the years he gave to St. Andrew parish ,the House of CCharit and other religious institutions . He decided to deed the rental property to a parish. He did so, and the parish later sold the property for $110,000. Sandee's original cost was less than $25,000. By giving the property, he saved the capital-gains tax and was allowed to deduct the entire fair-market value of the property on his tax return. Since $110,000 was more than he was permitted to deduct in the year he made the gift, he as allowed to deduct the excess during the next few tax years, up to a maximum. Had he sold the property himself, he would have paid thousands of dollars in capital-gains taxes on the $85,000 increase in value.


However, if property has a present fair market value less than the original cost, givers should consider selling it themselves, giving the proceeds to the organizations , and deducting the capital loss from their taxes. Fo example, Seamus and Carla Jones bought some resort property several years ago for $75,000 . A prospective buyer has offered to purchase it for $60,000 . If they sell it for that amount, they will experience a $15,000 loss. If they want to contribute $60,000 to St. Andrew the Apostle , they can gift the proceeds from the sale. . WhWheneve al estate is used to fund a or deferred planned gift, special attention should be given to environmental and other concerns. (Advice of counsel should be sought on all transfers of real estate .

Gifts of Real Estate
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