Want to make a big gift to Ronald McDonald House Charities of San Diego without touching your bank account? Consider donating real estate. Such a generous gift helps us continue our work for many years.
A gift of real estate also helps you: When you give appreciated property you've held longer than one year, you qualify for a federal income tax charitable deduction. This eliminates capital gains tax. Plus you no longer have to deal with that property's maintenance costs, property taxes or insurance.
Another benefit: You don't have to hassle with selling the real estate. You can deed the property directly to the House or ask your attorney to add a few sentences in your will or trust agreement.
Ways to Give Real Estate
You can give real estate to the House in the following ways:
An outright gift+
When you make a gift today of real estate you've owned longer than one year, you qualify for a federal income tax charitable deduction equal to the property's full fair market value.
This deduction lets you reduce the cost of making the gift, and it frees cash that otherwise would have been used for taxes. By donating the property to us, you also eliminate capital gains tax on its appreciation.
See My Benefits
A retained life estate+
Perhaps you like the tax advantages a gift of real estate would offer, but you want to continue living in your residence for your lifetime.
You can transfer your personal residence or farm to the House but keep the right to occupy (or rent out) the home for the rest of your life. You continue to pay real estate taxes, maintenance fees and insurance on the property. Even though the House wouldn't take possession of the residence until after your lifetime, since your gift can't be revoked, you'd qualify for a income tax deduction for a portion of your home's value.
See My Benefits
A bargain sale+
Want to sell us your property for less than the fair market value? A "bargain sale" may be the answer.
When you make a bargain sale, you sell your property to our organization for less than what it's worth. The difference between the actual value and the sale price is considered a gift to us. A bargain sale can be an effective way to dispose of property that's increased in value.And it's the only gift vehicle that provides you both a lump sum of cash and a charitable deduction (when you itemize) at the same time.
See My Benefits
A charitable remainder unitrust+
You can contribute any appreciated real estate you've owned for more than one year, provided it's unmortgaged, in exchange for an income stream for life or for a term of up to 20 years. The donated property may be a residence (a personal residence must be vacant upon contribution), undeveloped land, a farm or commercial property.
Real estate works well with only certain variations of charitable remainder trusts. Your estate planning attorney, who will draft your trust, can give you more details.
See My Benefits
A charitable lead trust+
This gift can be a wonderful way for you to benefit the House and simultaneously transfer appreciated real estate to your family tax-free. You should consider funding the charitable lead trust with real estate that is income-producing and expected to increase in value over the term of the trust.
See My Benefits
A memorial or endowed gift+
A gift of real estate may be a perfect way to honor your loved one in perpetuity. When you make an endowed gift of real estate, your contribution is invested with and becomes part of our endowment.
An annual distribution is made for the purpose you designate. Because the principal remains intact, you'll gift will always provide support for our families.
A donor-advised fund+
When you transfer real estate to your donor-advised fund, you avoid capital gains taxes and qualify for a federal income tax deduction based on the fair market value of the property when you itemize on your taxes.
An Example of How It Works
Janet purchased a rental property years ago and has watched it grow steadily in value. Still active in her career and traveling frequently, she's beginning to find management of the property more and more of a hassle. At this stage of her life, Janet has decided to move to a 55+ condominium development, where all exterior maintenance is provided and she doesn't have to worry about security issues. Janet sees this as an opportunity to give her rental property to a charity that's important to her while realizing valuable tax benefits.
Janet avoids capital gains tax on the appreciation and qualifies for a federal income tax charitable deduction of $250,000, which is the property's fair market value today. She is able to claim 30 percent of her $200,000 adjusted gross income, or $60,000, in the year of the gift. In the five years following, she can continue to use up the remaining $190,000 deduction. Janet is happy in her new condo and loves knowing that the gift of her property will make a big difference supporting our mission.