Gifting Real Estate - Is it Right for You?Philanthropic Investing/Tax Savings Through Gifts of Real Estate

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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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APPROVED CHARITY

THIRD PARTY

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Gift of property

Tax deduction & income stream ($)

Remainder interest

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NO

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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