FAQs

The concept of donating versus selling, is most easily explained with an example:

A 69 year old widow owns an office building. She would like to maximize the benefits of the asset for her children, and support her favorite charity, if possible. The table below summarizes her options. After careful consideration, she found the greatest benefit to her children and the charity was to donate the building.

Additional notes: In the “Sale” scenario, to generate an income of $700k/year (as in Donation scenario) on the proceeds after selling the property, donor would have to invest long term safely at 11% rate of return.*- Due nine months from death in cash

**- Less sales cost and discount for cash

Banks outsource real estate to designated brokers who may not be totally qualified to handle a particular type of real estate. Furthermore, the designated broker may not be an expert in the area where a piece of real estate is located. In addition, most real estate professionals are not up-to-date on laws and regulations governing charitable contributions.

The experts at Real Estate for Charities recognize these inherent pitfalls for trust officers. They are dedicated, full-time, to supporting advisors, donors and charities, alike with a network of professionals that have access to updated issues as they relate to donated real estate.

Attorneys are experts at the law. Just as the bank trust departments outsource their real estate services, estate planning professionals must rely on outside professionals to complete these real estate transactions. Donors should suggest that Real Estate for Charities be brought in as a service provider in the real estate process.

It is Real Estate for Charities’ responsibility to manage real estate state transactions so that maximum benefits for both the donor and charity can be achieved. This can be accomplished at no additional cost to the donor. A full-time commitment to real estate as it relates to charitable giving provides Real Estate for Charities with the knowledge to structure unique, creative, even unusual transactions that maximize benefits to all parties.

Most commercial real estate agents have no special training in the intricacies of transactions associated with charitable donations.Planned giving professionals rarely have real estate expertise.

Clearly, special qualifications are needed.

The Internal Revenue Tax Codes are updated on an on-going basis. Real Estate for Charities is constantly monitoring IRS changes to capital gains taxes, ordinary income taxes, gift taxes and inheritance taxes so they can provide you, or your company with the most up-to-date advice.

The team at Real Estate for Charities has spent years building relationships and a knowledge of numerous charitable organizations. Utilizing their extensive network, they can assist you in identifying a charity that supports causes that are important to you and/or your company.

Donating nonproductive assets to charity can result in significant tax advantages as well as philanthropic benefits. The knowledge base at Real Estate for Charities will help maximize the tax benefits of such donations and design sophisticated structures that meet a variety of corporate goals.

Model 1 — Employee Benefits

Donor: Donates nonproductive real estate assets into Charitable Remainder Trusts, which fund corporate personnel packages for executive incentives, severance or retirement.Charity: Receives corpus of the trust at termination date of trust.

Donor Benefits: Timely property disposal. Tax benefits. Philanthropic funding and alternative funding of employee benefit programs.

Model 2 — Bargain Sale

Donor: Sells property through Real Estate for Charities, a portion of the sale price is returned to the donor and the balance is gifted to one or more charities.Charity: Receives the partial contribution and either uses or liquidates it.

Donor Benefits: Property disposal with lower capital gains tax. Tax credit for charitable contribution. Enjoys charitable goodwill while fulfilling philanthropic commitments.

Model 3 — Vacant Land

Donor: Sells excess land, originally purchased for a building program, through Real Estate for Charities. Land has greatly appreciated but lays idle. Donation made to favorite, qualified charity as land-lease or gift.Charity: Either receives right to use (e.g. recreational facility) or revenues from sale.

Donor Benefits: When sold, the current appreciated value of land provides large tax benefits. When leased, the donor receives tax credit for donation and expenses of the lease payment. Enjoys goodwill and creates positive corporate visibility in community.

Model 4 — Donor Advised Fund

Donor: Facilitated by Real Estate for Charities, donor transfers property in which donor retains partial control of the charity’s donated distribution.Charity: Receives an ongoing income stream from fund.

Donor Benefits: Retain control and protects asset. Receives tax credits. Enjoys positive community relations and good will.