The requirements for giving real estate are essentially the same as for gifts of securities. Almost any type of real estate may be donated; undeveloped land, farms, rental and commercial property, vacation homes and your personal residence.
The charitable deduction is for the full market value of the unencumbered real estate and substantiated by a professional appraisal. The deduction is 30% of your adjusted gross income with amounts in excess of 30% carried forward for up to five years. You avoid capital gain taxes and there are no gift taxes. As a result of removing the property from your estate, you have reduced potential estate taxes as well.
Example: Mr. & Mrs. Jones have a vacation home on lake property that has a fair market value of $500,000 as a result of the tremendous increase in lake property in Northern Wisconsin. They paid $50,000 25 years ago and would like to dispose of the property because they are no longer able to visit there on a regular basis. Giving the home to the International Crane Foundation, Inc. allows them to avoid the capital gains, create a charitable tax deduction and provide ICF with a major gift they could not afford to do previously.
Retained Life Interest
A unique method of obtaining a tax deduction and retaining use of the property is to transfer title of your home to ICF and retain an interest for lifetime use by you and/or your spouse. There is a current tax deduction based on the amount of time you will continue to maintain residency. Once you have physically left the residence the property is available to ICF. Maintenance, taxes and insurance are the responsibility of the donor during the donor's residency.
Example: Mr. & Mrs. Jones decide they would like to continue the use of the lake property example listed above. By giving title to ICF currently and retaining a life interest they would receive a substantial current deduction avoid capital gains and still fish from the pier whenever they choose.