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Gift of Real Estate

 

 

Gift of Real Estate


● Do you own residential, commercial, or undeveloped real estate that has appreciated in
value and you no longer wish to manage or maintain it?
● Has your home risen in value beyond the capital gains exclusion rate?
● Do you have a vacation home that your family no longer uses?
● Would you like to use your real property to pay income to you for life?


If you are interested in making a gift to Nevada SPCA and your answer to any of these questions
is “yes,” a gift of real estate may be a good option for you.


The benefits of a gift of real estate


There are several ways you can donate real estate. Each method presents distinct advantages,
depending on your circumstances and goals. By giving property to Nevada SPCA, you can avoid or reduce the capital gains tax you would
otherwise pay on sale, you may be able to take a substantial income tax deduction, you may
choose to receive income for life, and you will have the satisfaction of providing significant
support to the Nevada SPCA.


A few things to know before making a gift of real estate:
● In general, it is Nevada SPCA’s policy to sell gift property rather than maintain and
manage it.
● Before accepting any gift of real estate, a Nevada SPCA representative must inspect your
property to determine whether it can be sold within a reasonable amount of time and to
ensure that there are no significant liabilities associated with it.
● If you intend to claim a charitable income tax deduction for your gift of real property, the
IRS will require you to obtain an independent, qualified appraisal to determine the
property’s fair market value.
● Due to tax issues, debt-encumbered property is usually not appropriate for a charitable
gift of real estate.

Options for making a gift of real estate


There are five primary ways to give a gift of real estate to Nevada SPCA.

These options are described in full below:


Give your residence, rental/commercial property, or undeveloped land outright to Nevada
SPCA
Once Nevada SPCA has agreed to accept a gift of real estate, you may give a partial or
full interest in your property by simply executing and recording a deed naming the
Nevada SPCA as the new owner.


Give property to establish a charitable remainder trust
By establishing a charitable remainder trust (CRT), you can provide for a future gift to
Nevada SPCA while receiving a tax deduction and a long-term income stream. When you
give real property to establish a charitable remainder trust, the trustee, which could be
Nevada SPCA, can sell the property without paying capital gains tax. The full proceeds
from the sale can then be invested by the trustee and used to pay you and/or your
beneficiaries an income for life or for a term of years. After your lifetime or when the
trust term ends, the remaining funds will pass to the Nevada SPCA to be used for the
purpose(s) you designate. You may also be able to use a partial interest in the real
property to fund the trust, and retain the cash proceeds from the sale of the remaining
interest in the property.


Make a gift of a remainder interest in your home
A gift of a remainder interest in your home may be right for you if you wish to continue to
live in your home for your lifetime. With this arrangement (sometimes called a retained
life estate), you transfer a remainder interest to Nevada SPCA, which entitles you to a
significant income tax deduction. You also enter into an agreement with Nevada SPCA
that you will continue to perform all obligations of ownership, such as paying taxes and
insurance. When the property comes to Nevada SPCA, without probate or other
administrative procedures, the Nevada SPCA will use the proceeds of the sale as you
have instructed.

Sell your property to Nevada SPCA at a discounted price, also known as a bargain sale
In some limited circumstances, Nevada SPCA will purchase property at a discounted
price—typically not more than 50 percent of its fair market value. The difference between
the price Nevada SPCA pays and the fair market value (as determined by appraisal)
constitutes the gift to Nevada SPCA, which entitles you to an income tax deduction. This
also provides you with cash from the purchase by Nevada SPCA.


Leave property to Nevada SPCA through a bequest
You can make a gift of real estate through a provision in your will or revocable trust
agreement. Once Nevada SPCA receives the property, it is generally sold and the
proceeds are used according to the purposes outlined in the bequest documents.