January 30, 2024
Gifting an appreciated asset, like real estate, can be complicated. Let’s make it simple.
“A generous person will prosper; whoever refreshes others will be refreshed.” ~ Proverbs 11:25
Many of the Kingdom-minded individuals and families who choose to donate through WatersEdge face an interesting question: how on earth can I donate this? Cash isn’t the only accepted form of donation; gifts of stock, mutual funds, and many privately-held investments can also fund most of the giving vehicles we offer. But for many donors, gifts of real estate can be the most impactful — and tax-efficient — ways to support Kingdom work. Whether it be a family home, rental property, farm, commercial property, mineral interest, or other real estate holding, now is a great time to consider gifting real estate.
Why? In recent years, real estate markets have been booming. We’ve all heard the adage, “Buy low, sell high,” but for those who are charitably minded and own appreciated property, it’s a great time to donate high, as this has the double bonus of increasing your tax savings and making your gift to ministry even greater. Charitable gifts funded through real estate are among some of the most significant gifts many ministries have ever received.
Whether you want to make a gift during your lifetime or at your passing, real estate giving solutions can be tailored to your charitable, income, and tax objectives. Real estate donations can also alleviate or eliminate the ongoing cost and stress related to managing the property in question.
The IRS requires specific procedures to be followed in order to take an income tax charitable deduction. WatersEdge can help you navigate this process alongside your professional advisors and will not only facilitate the property transfer but also ensure your charitable goals are fulfilled. We can support you whether you choose to use your gift to directly fund ministry or place the property in an endowment that multiplies your gift through perpetual annual distributions.
Here are a few things to consider as you begin the gifting process.
What Types of Real Estate are eligible for tax-advantaged giving?
- Personal residence
- Rental property
- Investment property
- Vacation homes
- Agricultural property
- Commercial Property
- Mineral Interests or leasehold interests
Important Considerations When Making a Gift of Real Estate:
- Visit with WatersEdge early in the process.
It’s important to consult with our team well in advance of discussing the sale of the property with a third party or listing the property for sale so that you remain eligible for the greatest tax benefits possible.
- Plan ahead! Real estate gifts take time to transfer.
If the donor would like the gift to take place in a certain tax year, it’s important to plan ahead and allow several months to complete this type of gift — as there are legal, tax, and appraisal factors to consider.
- IRS Requirements and Qualified Appraisals
In advance of accepting real estate donations, a WatersEdge representative may inspect the property and gather information about it to ensure it complies with WatersEdge’s Gift Acceptance Policy and IRS requirements. For donors who itemize their income tax deductions and intend to claim a charitable income tax deduction, the IRS requires an independent, qualified appraisal to determine the property’s fair market value.
If you have real estate you would like to consider donating, contact our team. We’ll walk you through the process and help you achieve your giving goals.
By Christa Rogers,
VP, Client Engagement