Giving Real Estate

Let's Talk Real Estate
Many individuals who make gifts to charitable organizations like the Fresno County Library typically give cash or appreciated securities. In Fresno County, where many people have significant wealth tied up in real property, a gift of real property can result in significant tax savings and other economic benefits.

Types of Real Estate to Give Away
In some situations, real estate can be the best asset to use for a charitable gift. In addition to saving taxes, gifts of real estate can generate increased income by putting the property into a trust. Most types of property can be used as a gift. Farms, rental units, other types of commercial property, vacation homes, and undeveloped land are some examples.

How to Give Away Real Estate
A gift of real estate can be completed in a variety of ways as outlined below. Don’t be frightened by the jargon, the concepts are actually quite simple.

Outright gifts given directly to the Fresno County Library entitle you to an immediate charitable income tax deduction. Completing the gift is as simple as transferring ownership title.

Bequests made as part of your estate plan give your estate an unlimited estate tax deduction.

Bargain sales are considered part gift and part sale. They entitle you to an income tax deduction based upon the value of the gift portion, reduce capital gains tax and provide you with cash from the sale.

Retained life estates enable you to make a gift while retaining the right to continue using the property during your life. This gift method is used primarily with personal residences but also extends to vacation homes and farms. You realize an immediate income tax deduction for a portion of the gift and an estate tax deduction.

Charitable remainder trusts are often the gift of choice when considering gifts of appreciated real estate. In addition to income and estate tax savings mentioned above, capital gains tax is avoided. Charitable trusts also feature the benefit of a lifetime income. They can be combined with a bargain sale (realizing immediate cash and life income) or with an insurance trust (used to benefit heirs, free from estate taxes).

Calculate how a charitable remainder unitrust can benefit you.

Calculate how a charitable remainder annuity trust can benefit you.

Charitable lead trusts are often created for the purpose of keeping real estate in the family while reducing or eliminating estate tax obligations. The lead trust provides income to the Fresno County Library for a predetermined period of time, and you are entitled to a significant estate or gift tax deduction. At the end of the trust term, the real estate is returned to your family, typically appreciated in value with no additional estate or gift tax obligation.

Calculate how a charitable lead unitrust can benefit you.

Calculate how a charitable lead annuity trust can benefit you.

Finally, before making a gift of real estate, consult with the Library Planned Giving Office on the following issues: how title is held, existing mortgages, environmental aspects and liens. Depending on the circumstances, these issues may delay or interrupt your intended gift. They must, however, be examined.

Please call Linda Calandra at (559) 488-3492, or e-mail us at Linda.Calandra**fresnolibrary.org, for more information.(replace ** with @ to send email)

The information on this site is not intended as legal, tax or investment advice. For such advice, please consult an attorney, tax professional or investment professional.