Gifts of Real Estate Q&A

What type of real estate can I donate?

Gifts of real estate can include a house, apartment building, farm, vacation home, commercial or industrial building, warehouse and income-producing and non-income-producing land.

What are the benefits of donating real estate?

By donating property you have the ability to provide a significant charitable gift without disturbing your investment portfolio or cash position.

If you have owned the property for more than a year, you are entitled to a tax deduction for the fair market value of the property while allowing you to avoid paying capital gains tax. You may apply the deduction for up to 30 percent of your contribution base, which generally is equal to your adjusted gross income, and carry any excess deduction forward for a maximum of five years.

The property, along with any future appreciation, also is excluded from your taxable estate.

Do I have to donate the entire property?

Real estate gifts don't have to be an all-or-nothing proposition. Partial interests of property can be gifted. For example, maybe you need the income from the sale of a second home. You could gift an undivided 1/3 interest in the property before the sale, which would generate a charitable deduction to offset the capital gains.

You control how much you want to give and how large a tax benefit you want to gain.

May I continue using my property?

You can irrevocably deed your property, such as your home, vacation property or farm, to The Dayton Foundation but reserve the right to use it during your lifetime. This arrangement, called a retained life estate, creates an immediate income tax deduction and an estate tax deduction.

You will, however, be responsible for all maintenance expenses, insurance, property taxes, etc.

Can I earn income on my gift?

You can donate real estate to a trust, such as a charitable remainder trust. The trust will sell the property and pay you income for life. This income might be a fixed amount or a fixed percentage of the trust’s assets. Any remaining assets in the trust may be donated to a fund that you establish at The Dayton Foundation.

How do I contribute gifts of real estate?

Gifts of real estate typically require certain procedural steps to be completed before the Foundation will consider or approve of such a gift. These may include a site visit to the property, a qualified appraisal, a title report and an environmental assessment.

The Dayton Foundation’s real estate gift policy also discourages the gifting of mortgaged property.

Please contact a member of our Development Department at (937) 222-0410 to discuss the details of such a proposed gift.

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