Most of us dream of acquiring real estate, our first home, a commercial building for a family business, or a downtown condominium when it’s time to downsize. But did you know that giving away real estate can also be exciting?
Real property donated to a qualified charitable organization can benefit the donor and the community. If you’re thinking of selling a property or have acquired a property through a family or business transaction, you may want to learn more about donating property to a charitable organization.
At the Oregon Jewish Community Foundation, we have seen generous gifts of real estate including the Park Tower Apartments, a downtown senior apartment building recently gifted by Harold (of blessed memory) and Arlene Schnitzer, and Jordan Schnitzer; and farmland along the Tualatin River donated by Barry and Susan Menashe. OJCF has sold condominiums, houses, lots and shares in real estate limited partnerships. These gifts can provide tax benefits for the donors and create new resources for charitable funds.
“Real estate gifts to nonprofits give sophisticated investors and donors one more approach to consider when reviewing their assets and charitable giving plans,” commented Carolyn Weinstein, a broker with the Hasson Company Realtors who has sold charitable gift property for the foundation.
Charitable gifts of real property can be structured in a variety of ways to meet the donor’s goals. For example, property gifts can be used to provide retirement income to the donor or someone else through a charitable remainder trust, while creating a charitable gift that can provide a tax deduction in the year the trust is established. A “life estate reserved” allows an individual to donate his or her personal residence through the transfer of the deed to the charitable organization, receive a tax deduction in the year of the transfer and continue to live in the residence for his or her lifetime or for a fixed period of time determined by the donor.
Once accepted by the nonprofit and sold, a gift of real estate can be used to establish a named permanent endowment, a donor advised fund or charitable remainder trust. These funds can be directed to benefit any qualified Jewish or secular nonprofit organization.
Complex IRS rules govern areas such as what is a qualified charitable organization, substantiating gift value through a qualified appraisal and allowable charitable tax deductions. A donor should always seek professional guidance from a CPA, estate attorney, or financial advisor in considering such a gift.
Charitable gifts of real estate are definitely worth exploring. For more information, visit OJCF’s website at ojcfgift.org, or the IRS at irs.gov/publications/p526/ar02.html.
Julie Diamond is the executive director of the Oregon Jewish Community Foundation, Oregon and SW Washington’s community resource for Jewish legacy giving and family philanthropy. The OJCF does not provide tax or legal advice. For more information on foundation services, visit ojcf.org or call 503-248-9328.