gifts of real estate
For some individuals, a gift of real estate may be an attractive way of making a significant gift to Boston College. Anyone downsizing to a smaller home, or confronting decisions pertaining to an unused vacation home or other property, might find a gift of real estate to be practical and tax-efficient, either now or whenever the property is no longer needed.
A donor who owns real estate and has held it more than 12 months can benefit in two ways by contributing the property outright to Boston College:
- The donor is entitled to an income-tax deduction based on the current, appraised fair market value. The donor can claim a deduction up to 30 percent of his or her adjusted gross income in the year of the gift. Any amount exceeding the 30 percent ceiling can be carried forward and deducted for up to five more years.
- The donor also avoids a potential capital gains tax on the property.
Note: Real estate gifts are expedited when there is no mortgage on the property.
A donor can also transfer real estate to a charitable trust while retaining the income from the trust. Through such a plan, a donor can convert a non-income-producing asset to new income, receive an income-tax deduction for part of the gift, avoid capital gains tax when the property is sold by the trust, and make a significant gift to Boston College.
Please consider these gift options:
- Outright gift: The home you are leaving can be given to Boston College outright. If you have owned it for more than a year, you receive a tax deduction for the full current market value, as substantiated by an appraisal, and you avoid capital gains tax on the appreciation.
- Retention of your personal residence or farm with retained use: You may want to continue living in your home for your lifetime (with life use for your surviving spouse, too). Transferring ownership of your personal residence to Boston College while retaining the enjoyment of the property for the remainder of your lifetime is known as a retained life estate. You can make the gift, deeding the property to Boston College today and getting a sizable, current income-tax deduction based on the value of the property and your age (and your spouse's age).
- Charitable remainder trust: Another alternative is to transfer your unmortgaged property to a charitable remainder trust when you are ready to move out. This trust would pay you (and, if you like, your spouse) income for life while providing Boston College with much-needed assistance when the remainder goes to it at the termination of the trust. In addition, you would receive an income-tax deduction for a portion of the property's value, and you would avoid the capital gains tax on any appreciation.
For more information, please contact the Office of Gift Planning.
The information on this site is not intended as legal, tax, or investment advice. For such advice, please consult an attorney or a tax or investment professional.