Gifts of Real Estate
Gifts of real estate and personal property can be a convenient way to make a sizable gift to Easterseals New Hampshire.
Federal tax laws encourage the gift of securities, real and personal property by permitting donors to make a charitable contribution deduction for gifts in support of the Easterseals New Hampshire’s mission.
Outright Gift
What is this?
Real estate property (e.g. residential real estate, commercial real estate, and/or raw land) is donated in its entirety. The property is then promptly sold, and the net proceeds are applied per the donor’s wishes.
Who is it a good option for?
This option is best for individuals or couples looking for the highest income tax deduction possible by making a real estate donation now. Of course, it is also removed from one’s estate for estate tax planning purposes.
Financial Benefits
There is a potential charitable income tax deduction on the full dollar amount of the qualified independent appraisal/fair market value. And, it is removed from the individual’s estate.
What do interested parties need to prepare for a meeting?
A qualified independent appraisal of the real estate property (paid for by the potential donor) is a really good start! Any information on “carrying costs” (e.g. insurance, property tax, maintenance, etc.) is also helpful to know.
Bargain Sale
What is this?
An individual offers to sell a piece of real estate to a non-profit for a price BELOW its appraised fair market value (FMV). The individual receives cash from the sale of the property plus a charitable income deduction for the FMV amount minus the sale price. ESNH assumes the duty of selling the property and reimbursing itself for what it paid the individual. The difference between the FMV and what it paid the donor is the gift amount.
Who is it a good option for?
People who want to remove an illiquid asset from their estate now, get cash in-hand, and receive a partial charitable income tax deduction.
Financial Benefits
Receiving a partial charitable income tax deduction and removal from one’s estate for estate tax planning purposes.
What do interested parties need to prepare for a meeting?
A qualified independent appraisal of the real estate property (paid for by the potential donor) is a really good start! Any information on “carrying costs” (e.g. insurance, property tax, maintenance, etc.) is also helpful to know.
Retained Life Estate
What is this?
The owner (or owners) deeds the property to a non-profit while retaining the right to live there; donor maintains property and all expenses during their lifetime. The property is then transferred to the non-profit within months of the donor’s passing, or the survivor’s passing (in the case of a couple). The property is then sold, and proceeds are applied per the donor’s (or donors’) wishes.
Who is it a good option for?
Those who are looking for a charitable income tax deduction and want the asset removed from the estate. A married couple with no mortgage, no children, and no plans to move (who may have been living there for 30 years already) are prime candidates for this, as an example. And, the individuals should NOT mind paying for the carrying costs (e.g. maintenance and repairs) for the rest of their lives, either.
Financial Benefits
The removal from the estate for estate tax planning purposes along with a partial charitable income tax deduction are the benefits.
What do interested parties need to prepare for a meeting?
A qualified independent appraisal of the real estate property (paid for by the potential donor) is a really good start! Any information on “carrying costs” (e.g. insurance, property tax, maintenance, etc.) is also helpful to know.
“Flip” Trust
What is this?
A piece of real estate is donated to a charitable remainder net income trust (“NICRUT”). The property is sold and the NICRUT “flips” to a standard unitrust format, is then invested into a diversified portfolio within the new standard trust, and pays 5-7% of the trust corpus for the donor’s lifetime.
Who is it a good option for?
An individual or couple who has a vacation home that the children don’t visit or want anymore. The individual or couple may also want a partial charitable income tax deduction while also removing the asset from the estate.
Financial Benefits
A quarterly income stream for life for one or more income beneficiaries (individual, couple, children, or grandchildren). A partial charitable income tax deduction is also a plus, as well as the removal of the asset from the estate for estate tax planning purposes. And, this option is great for donors wanting to convert low- or non-income producing property into a stream of income or themselves or loved ones while ultimately benefiting their favorite charities. A deferred charitable gift annuity (where the asset is donated but payout doesn’t come for a year or more later) could be similarly structured.
What do interested parties need to prepare for a meeting?
A qualified independent appraisal of the real estate property (paid for by the potential donor) is a really good start! Any information on “carrying costs” (e.g. insurance, property tax, maintenance, etc.) is also helpful to know.
Fractional Interest
What is this?
An individual or couple donates to charity an undivided interest in a piece of real estate property and receives a charitable income tax deduction. ESNH and the individual or couple decide who will market property for sale. Upon the sale’s execution, the donor(s) and charity emerge with their respective portions of the net proceeds.
Who is it a good option for?
Those who want a say in how the property is marketed, unlike other options related to real estate donations. The donor or donors partner with the non-profit on the sale of the property.
Financial Benefits
The removal of the asset from the estate and the potential for a partial charitable income tax deduction (relative to the appraised value). Carrying costs between the donor and the ESNH are also shared.
What do interested parties need to prepare for a meeting?
A qualified independent appraisal of the real estate property (paid by the potential donor) is a good start! Any information on “carrying costs” (e.g. insurance, property tax, maintenance, etc.) is also helpful to know.
Conservation Easement
What is this?
An individual or couple protects their land by donating or selling the development rights.
Who is it a good option for?
Someone who wants to receive a charitable income tax deduction but also have peace-of-mind that the property will be conserved in perpetuity.
Financial Benefits
The individual or couple receives a charitable income tax deduction or income for the difference between the fair market value (FMV) and the conserved value. The donor or donors STILL OWN THE LAND and can sell it subject to the conservation easement.
What do interested parties need to prepare for a meeting?
A qualified independent appraisal of the real estate property (paid by the potential donor) is a good start! Any information on “carrying costs” (e.g. insurance, property tax, maintenance, etc.) is also helpful to know.
For more information, please contact Kathy Flynn at [email protected] or 603.621.3413.