Many types of real estate may be donated: your home, farms, commercial buildings, vacation homes, or undeveloped land. This gift may be a convenient way for you to enjoy a charitable deduction based on the current fair market value of your property.
You can donate your property outright, place it in a trust, or gift it but retain the right to live in it, or give it through your will. All of these methods will enable you to enjoy personal financial benefits while supporting Carlow University in a meaningful and lasting way.
If you choose to give a gift of real estate as an outright gift, Carlow may use the real estate or the University may sell the property and use the net proceeds from the sale for whatever purpose you designate when you make your gift. You receive a charitable income-tax deduction for the full fair-market value of the unencumbered real estate. You may apply the deduction up to 30% of your adjusted gross income—in the year of the gift—with the five-year carryover provision. You avoid capital-gain tax on the appreciation you have in the property, and there are no gift taxes. Because you have removed the property from your estate, you may also reduce your estate taxes.
A donor who wants to recover a portion of the value of the property that he or she wishes to contribute to Carlow University may consider entering into a bargain sale transaction. In effect, a bargain sale is a sale of property to charity for less than its fair-market value. The bargain sale price must be any amount mutually acceptable to the charity and the donor.
You may give the property to Carlow University while retaining the right to occupy the residence or operate the farm. Such a gift of a remainder interest provides a charitable income-tax deduction for the present value of the remainder interest that frees up tax dollars into spendable income—without causing any disruption in your lifestyle. In addition, this plan permits you to escape any potential capital-gain tax on the built-in appreciation.
A gift of real estate may generate an income tax charitable deduction up to 30% of your adjusted gross income if you itemize. Any excess deduction may be carried forward for up to five additional years.
Before discussing a gift of real estate with us, the donor should consider several points: