Real Estate Assets
When real property has been owned for longer than one year (over 365 days) and is sold, long term capital gain "LTCG" taxes can be due. LTCG tax is a tax which is due on the difference between what the property was acquired for, plus improvements, and what the property was sold for. This tax can be a significant amount of money; depending on how long the property has been held and how much it has appreciated in value.
Appreciated real estate can make an excellent charitable gift. The donor will be eligible for a charitable tax deduction in the year of the gift. The charity can immediately sell the property and realize the full current fair market value of the property as a charity is not required to pay LTCG tax.
However, if the property has decreased in value over the period of time it has been owned, it will become more advantageous for the donor to sell the property and take a capital loss. The donor can then make a cash gift to the charity and take a current charitable tax deduction for the amount of the gift.
Contact a staff member to find out more about the benefits of real estate gifts.