Your Giving Options - Choosing the Plans for Your Charitable Future

The Charitable Real Estate Foundation can help you decide which of these options is right for you. Contact us to discuss the specifics of your potential gift. We will help you determine the timing and details of your gift. Then we will help you identify the charitable purposes of your fund or help you determine the organizations you want to benefit. Once your property is sold, the proceeds of your gift may be placed in your own named fund at The San Diego Foundation or be contributed directly to the charity of your choice.

Outright Gift to a Donor Advised Fund
You can make an outright gift of real estate to establish a donor advised fund endowment at The San Diego Foundation. Your property can benefit many charities and provide multiple tax benefits, including a charitable income tax deduction for the fair market value of the donated property held for more than one year, the avoidance of capital gains tax that would have been incurred if the property were sold directly by you, and the avoidance of potential future estate taxes on the gifted property.

Gifts by Will or Bequest
Charitable gifts of real estate also may be made through your will or living trust. An outright gift through the donor’s will establishes a 100 per cent charitable deduction for estate tax purposes. You would avoid potential future estate taxes and your family will not have to deal with the upkeep and sale of the property, liability insurance, and property taxes. Should you be interested in the gifting arrangement, we can provide suggested legal language to be used by your attorney. Although a charitable gift by will provides no current income tax advantages, it has tax advantages for the estate at the donor’s death.

Charitable Remainder Trust (CRT)
This option works best if you have highly appreciated, low-yielding real estate. A CRT allows you to make an irrevocable gift now, while receiving substantial tax benefits and an income stream for the remainder of your life, as well as for the life of your spouse. Benefits include the avoidance of capital gains tax from an outright sale of the property, an immediate income tax deduction for a percentage of the fair market value of the property and the avoidance of future estate taxes on the gifted property.

Life Estate Reserved
If you want to retain the use of property for the remainder of your and your spouse's lifetimes, you may still be able to gift it to the Foundation now and receive an immediate income tax deduction for a portion of the current fair market value of the property. This gift is referred to as a life estate reserved.

Bargain Sale
A bargain sale is when you sell an asset to the Charitable Real Estate Foundation for less than its market value.  The bargain sale is advantageous to a donor who doesn’t wish to contribute the entire value of the property to the nonprofit. The excess of fair market value over the value returned to you is a charitable gift. You will benefit from the bypass of gain on the gift portion and receive a charitable deduction for that portion. You will recognize a taxable gain on the value you receive.

Undivided Interest
A donor may execute a deed conveying an undivided interest in a property to a nonprofit.  The donor receives a charitable deduction based on the percentage of the gift to the total value of the property, less any discount applied to the partial interest.  This is similar to the Bargain Sale but the nonprofit doesn’t purchase the property from the donor.  Instead the nonprofit receives an interest in the property and together they sell the property and the proceeds from the sale are allocated based on the percentage of ownership.

To learn more about donating real estate, please call The Charitable Real Estate Foundation at (619) 235-2300.

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