Gifts of Real Estate

Considerations

A gift of real estate offers you the opportunity to make a significant charitable contribution with a tax-friendly outcome. There are several ways to donate real estate depending on your situation.

  1. Outright Gift: An outright gift may be the simplest solution if you own property that is not mortgaged, has appreciated in value and that you no longer need or use, such as a second home or vacation property. You can deduct the fair market value of your gift and avoid all capital gains taxes. Plus, you no longer have to worry about the cost of continued ownership, and you have removed that asset from your taxable estate.
  2. Retained life estate: Did you know that you can transfer the deed of your personal residence or farm to us now and keep the right to use the property for your lifetime and that of your spouse? You will receive a current charitable deduction in an amount that is based upon your and your spouse’s life expectancy and the value of the property.
  3. Bargain sale: A bargain sale can generate a gift that is less than the full fair market value of the property. In this scenario you agree to sell the property to a charitable organization at less than its fair market value. The difference between the sale price and the fair market value is your charitable deduction. While the tax rules relating to a bargain sale are somewhat complex, the net result is often more favorable than selling the property at fair market value and making a charitable contribution from the realized capital gain.

St. Croix Valley Habitat for Humanity welcomes donations of foreclosed property, vacant land, homes, townhomes and more. Turn vacant land into a home for a deserving family – and a tax deduction for you! For more information, contact Executive Director, Dave Engstrom or 715-425-5623.