Real estate is an excellent way for some individuals to make a significant gift to the REF that might otherwise not be possible. A gift of real estate is a tax-wise method of providing support for the Foundation. A residence, summer home, farm, commercial property, or vacant land may have appreciated in value to the extent that its sale would result in a sizable tax on the gain. If given outright to the REF, you can avoid this tax and realize a charitable deduction for the full fair market value. The property gift can also shelter your estate from future taxes.
Benefits of a Real Estate Gift to the REF
- You can bypass capital gains taxes
- You can obtain a charitable income tax deduction equal to the appraised value for up to 30% of your adjusted gross income
- You play an integral role in advancing patient care
Generally, gifts of real property should result in a contribution to the Foundation of at least $50,000.
Please note: To substantiate the value of a gift of real estate for income tax purposes (if it is worth more than $5,000), you will need to obtain an independent appraisal from a qualified appraiser.
An Outright Gift
For an outright gift of real estate to occur, a deed is drawn up that transfers your property to the ACR Research and Education Foundation. The REF credits you with a gift equal to the fair market value of the real estate. This value is determined by a fair market value appraisal which is the donor's responsibility to obtain. You are eligible for a charitable income tax deduction for the appraised value and you avoid any capital gains tax for which you might have been liable had you sold the property.
Example of Real Estate Gift
Dr. and Mrs. Brown, who are in the 31% income tax bracket, would like to make a charitable gift to the REF. They have owned a rental home - now worth $250,000 - since purchasing it ten years ago for $100,000.
By donating this property to the REF, the Brown’s will receive a $50,000 charitable deduction, which saves them $77,500 in income taxes (31%). In addition, the Brown’s avoid the potential capital gains tax of $30,000 on the $150,000 appreciation (20%).