gifting real estate
Post on 13-Apr-2017
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Gifting Real Estate - Is it Right for You?Philanthropic Investing/Tax Savings Through Gifts of Real Estate
kiddermathews.com
Charitable Gift AnnuityHow It WorksYou transfer title to the property to a Charity for an agreed upon stream of payments to designated beneficiaries over their life term or a fixed term not to exceed 20 years
The payments are fixed and do not change over time
The Charity may use the property or sell it use the proceeds in furthering its mission
BenefitsYou receive an income tax deduction based on a percentage of the appraised fair market value of the donated property
No capital gains taxes will be paid on the sale of the property, but will be taxed over time as payments are received, a portion as ordinary income, a portion as capital gain and a portion as a return of equity (tax free)
Receive a consistent, steady stream of payments for life
The monthly payments may exceed those available from other sources such as stocks, bonds, CDs or saving accounts
You are relieved from the responsibility of owning, managing, marketing and selling the property
This May Be Right For You If...You want to avoid paying a significant portion of the proceeds in taxes resulting from selling an appreciated real estate asset
You want to create a life-long consistent income stream for named beneficiaries, removing risks associated with other types of investments
You want to reduce your estate tax liability by removing a large taxable asset from your estate
You want to make a significant gift while receiving a lifelong steady income stream
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Assets
Tax deduction & payment stream ($)
Remainder comes to us
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NO
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GIFT ANNUITY
APPROVED CHARITY
ALAN DAVIDSON, CCIMVice President Investments Gifting Strategies
A thirty plus year veteran in commercial real estate with a background in investment transactions, leasing and asset management, Alan represents charitable organizations and donors facilitating gifting of appreciated real estate assets to increase contributions for qualified 501(c) (3) charities and maximize tax, income and estate benefits for donors. He is a Board of Directors Member of the CCIM Foundation, Chicago, Il and The Almost Famous Theatre Company, Phoenix, AZ.
Contact
Alan Davidson, CCIM Vice President Gifting Strategies/Investments aland@kiddermathews.com T 602.513.5106 C 480.797.0100
kiddermathews.com
Kidder Mathews 2555 East Camelback Road Suite 100 Phoenix, AZ 85016
Charitable Bargain SaleHow It WorksYou sell your home, commercial property, vacation home or other property to a designated charity for a price below the appraised fair market value
The identified charity may use the property or sell it and use the proceeds to further their mission
Benefits
You receive an income tax deduction based on the appraised fair market value of the donated property
You pay no capital gains taxes on gift portion of the transfer
You may receive fixed payments over time or a lump sum at the time of sale
You may receive both a lump sum of cash and a charitable deduction
Retained Life EstateHow It WorksYou agree to transfer title to your home, farm or vacation home to a designated charity, retaining a “life estate” for the rest of your life or a term of yours for yourself and/or others
You continue to live (or use) the property for the rest of your life, during which time you remain responsible for maintenance, insurance and taxes
At the end of the lifetime or agreed upon term, the identified charity may use the property or sell it and use the proceeds to further their mission
BenefitsYou receive an income tax deduction based upon a portion of the appraised market value of the property
You can give a significant gift today, receive an income tax deduction while retaining the security of using your property for the rest of your life
If at any time you no longer wish to live in your home, you can give up your life estate and receive an additional income tax deduction
This May Be Right For You If...You want to donate property to a designated qualified charity today, but don’t want to move out until sometime in the future or at the end of your life
You get to make a gift today, receive recognition for that gift today, receive an income tax deduction and still remain living in or using the property until some future date
Remove a highly appreciated asset from your estate, thereby reducing estate taxes
Charitable Remainder TrustHow It WorksA trust is created in your name and you transfer title to the property into the trust
You designate beneficiaries to receive payments for life or for a fixed term not to exceed 20 years
You designate a charity(s) who will receive the remainder interest
You choose the annual trust payout, minimum of 5%
The trust sells the real estate and invests the proceeds in a portfolio of investments controlled by the trustee (usually the Donor)
After the lifetime of the beneficiaries, the designated charity(s) receives the remaining balance
BenefitsYou receive an income tax deduction based on the appraised fair market value of the donated property
No capital gains taxes will be paid on the sale of the property, so the full value of your property is available to generate payments
Payments received by you or your designated beneficiaries have the potential to grow, which may buffer the payments against inflation
You may make additional gifts to the trust over time, thus qualifying for additional tax deductions and increased trust payments
This May Be Right For You If...You want to get away from the day-to-day management responsibilities
You want to avoid paying a significant portion of the proceeds in taxes resulting from selling an appreciated real estate asset
You want to create a life-long income stream for named beneficiaries
You want to reduce your estate tax liability by removing a large taxable asset from your estate
You want to make a significant gift while retaining or increasing your income
This May Be Right For You If...You want to donate property to a designated qualified charity and receive:
A portion of the sale in cash at the time of sale
An immediate income tax deduction
Avoid paying capital gains taxes on the donated portion
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Sell property to us below market value
Tax deduction & lump sum payment ($)
We use or sell property
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NO
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APPROVED CHARITY
THIRD PARTY
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Gift of property
Tax deduction & income stream ($)
Remainder interest
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TRUSTAPPROVED CHARITY 1
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Transfer future interest in your home
Continue living there and get a deduction
DO
NO
RAPPROVED CHARITY
THE CHARITY OWNS THE PROPERTY
IN THE FUTURE
Asset preservation and protection
Substantial income tax savings
Avoid capital gains tax on sale
Receive a lifetime income
Create a lasting legacy
Reduce estate taxes
BenefitsGifting Real Estate assets to a qualified charity can be daunting and requires an understanding of the gifting process. Engaging a team of experienced professionals is critical. Kidder Mathews is uniquely positioned to provide a variety of services including real estate valuation, comprehensive due diligence studies, managing and marketing properties to obtain maximum value.
Outright Donation
Bequest by Will
Charitable Bargain Sale
Retained Life Estate
Charitable Remainder Trust
Charitable Gift Annuity
Ways To Give
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