Part 53

Thomas M. Boles, 33°, Grand Cross
Director of Development
Donating real estate has several financial benefits, including a life income for yourself and/or others.

The gift of real estate seems to be more and more popular with charities. I guess it’s because of the dramatic increase in property values over the past several years. Further, it could mean that some donors wish to avoid the hassle associated with the sale of real property, while others wish to diversify their holdings without incurring capital gains tax.

We know that a gift of real property, of one kind or another, brings many benefits. It

• Assures a life income for yourself and/or other beneficiaries.

• Increases your spendable income.

• Avoids or reduces capital gains tax.

• Reduces estate taxes.

• Claims an income tax charitable deduction.

• Allows professional management and administration of the asset.

The Scottish Rite Foundation is interested in receiving real property provided, of course, that it falls into acceptable categories as defined by the government. The properties we are interested in include:

1. Personal residences, condominiums, and vacation homes.

2. Farms, ranches, forest land, undeveloped land (hopefully with mineral rights).

3. Apartments and commercial buildings, including rental properties.

Property can be given in many different ways, depending on what is best for the donor as well as the Foundation. Just a few ways would be:

• An outright gift.

• A charitable remainder trust.

• A retained life estate plan.

• A bequest as an inclusion in your will.

• A retained life estate with gift annuity plan.

• A bargain sale.

Please be aware that before we can accept your property, it must have a recent appraisal by an independent appraisal company, a physical review and inspection, as well as a title search. Also, due to the government environment impact laws, we must be assured the property is free of hazardous substances. Further, to insure an annuity payment to the donor, the property must either be marketable or income producing.

Some properties are not acceptable. This would include mortgaged property (per IRS regulations) and properties that would require an indefinite financial obligation to the Foundation. I have found it to be true that most real estate is really a "dead" asset, and when you think about it, it wouldn’t buy a cup of coffee as it stands, no matter its value. So why not take a look at your real estate holdings, and pass it by us. We may be able to (1) increase your annual income, and at the same time (2) provide you with an excellent charitable tax deduction; and (3) an escape from that awful capital gains tax.

Drop me a line and let’s look at the opportunities together. 

Please Note: This information is distributed with the understanding that the author is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expertise is required, the services of a competent professional should be sought. From: A Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers. 
Thomas M. Boles
has worked extensively in fundraising for children’s programs throughout our Fraternity. For more information see coupon above, or call Tom at 562–691–4227 (Fax 562–691–5327) or the Scottish Rite Foundation, S.J., USA, at 202–232–3579, ext. 122.