Personal Finance: Using Real Estate for Charitable Giving : Bryan ...

Whether you are looking to let a vacation home go, eliminate a problem property, or just want to make a big difference without spending a lot of liquid capital, a charitable gift of real estate presents a surprising option.

Usually, when you think of charitable giving, you either think of volunteering your time or donating money. But some real estate investors are opting to give the gift of land to their favorite charities instead. Why? Because giving real estate comes with major advantages for tax and estate planning, as well as allowing you to make a major donation to a charity even if you do not have the liquid assets to do so in the magnitude that you might wish. You?ve probably heard of ?car angel? and ?boat angel? charities that will take your unwanted vehicles off your hand, but ?real estate angel? charities tend to fly under the radar. Here are three things to consider if you want to give the gift of property before the end of this year:

1. How will it affect my finances?
   Any savvy real estate investor knows that some of the best deals out there can be found in possession of people who simply do not want the hassle of owning additional properties. Not only will donating your real estate potentially net you a huge tax deduction (remember, we?re not accountants, so don?t take our word for it ? talk to your financial planner) but it can also save you money on property taxes, upkeep, and many other ?quiet? little expenses that can add up quickly on extra property.
2. Who wants it?
   Not every charitable organization accepts donations of real estate, but more will than you might think. Find out what your charity would do with the property. Would they sell it and then credit you for the amount paid for the property? Would it be used to expand physical buildings and resources? The answers to these questions will help you determine not only how the gift will affect your charity for the better, but also how it will affect the gift process and your finances moving forward.
3. Why would I do this?
   Some people actually opt to give away second homes or vacation cottages in order to preserve family harmony upon their deaths. You might not want to let your lake house go while you are living, but donating it at death is actually a fairly common option for property owners who fear that leaving a property in the family will lead to discord. You will have to explore your own motivations carefully to make sure that a charitable gift of real estate is right for you.

Have you ever given away property? Why or why not?

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Category: Real Estate

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