If you are exploring ways to give to the Business Honors Program, your property opens the door to a unique philanthropic opportunity: donate the property to the Business Honors Program, either now or whenever you no longer need it.
If you've owned your home or other real estate for a long time, it has most likely increased in value. What happens if you sell the property? In many circumstances, should you not meet the requirements of available tax breaks, you must pay capital gains tax on the property's appreciation. Plus, marketing and selling real estate takes time and effort, even if you use professional assistance.
How It Works
Outright Gift. You may transfer the property by deed to the BHP, and the property will be sold unless there is a special reason for holding it.
Life Income Gift. You may transfer real property to a charitable remainder trust where it will be sold by the trustee. The net proceeds from the sale are invested and income is paid to you and/or other named beneficiaries. The amount of income depends on the net proceeds realized from the sale of the property in combination with the payout rate stated in the trust document. At the death of the last of the income beneficiaries, the assets of the trust pass to the BHP to be used as you have designated.
Life Tenancy Gift. You may transfer ownership of real property to the BHP but retain the right to live in the property for your lifetime. You receive an income tax charitable deduction for the present value of the remainder interest of the gift. Upon your death, the property can be sold or used by the Business Honors Program.
Undivided Interest. You may convey an undivided fractional interest in the property. For example, you may make the BHP co-owner by giving a one-third, one-half or three-quarter undivided interest in a residence, commercial property, farm or ranch, a commercial building, subdivision lots or any undeveloped piece of land. When the property is sold, the Business Honors Program shares proportionally in the proceeds.
- Eliminate long-term capital gains tax on an appreciated asset
- Receive a charitable income tax deduction based on fair market value
- Avoid the time, effort, and expense of owning property
- Satisfy your charitable intentions toward the BHP
Make a Gift
For information on Real Estate, contact Dianne Bangle in the McCombs School at (512) 475-8177.