Real Estate Giveth As Well As Taketh Away

According to the Wall Street Journal, donations of real estate are gaining popularity–and not just the classic parcel-in-the-swamp-with-no-sewer-connection.  The Journal focused on Consumer’s Union, which received a valuable mountaintop in return for an annuity–a great bargain, considering that the donors are in their 90s.

Annuity-for-asset planned giving is nothing new–"Let the University of Chicago Provide You With An Income for Life" is a standard come-on–but its use for real property will continue to increase as the Greatest Generation looks to dispose of homes their heirs don’t want while Baby Boomers seek to cash in on the value of second homes becoming too expensive or troublesome to maintain.

So while in many ways soaring real-estate values are a bane to nonprofits (see "A Real-Life Game of Monopoly," below), they have at least the potential to be a boon as well.  Just as donors contribute appreciated stock to avoid paying capital gains taxes on their increased value, they can contribute appreciated real estate (or sell it to a charity at a discount) and secure significant tax benefits.  And if charities offer an annuity in return, the deal is sweeter still. 

Something to keep in mind when you’re trying to figure out one more way to help people be generous to your agency.  As Paw O’Hara reminds us, "Land is the only thing that matters, Katie Scarlett–land is the only thing that lasts!"

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One Response to “Real Estate Giveth As Well As Taketh Away”

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