A lot of people use the age-old strategy of purchasing real estate when prices are very low, and selling real estate when prices are too high. This has always been true for most Americans. Fortunately, there are also some people who understand the benefits related to donation of real estate to charity.
Donating your real estate to a qualified and accredited charitable organization can offer numerous benefits. If you are not familiar with the concept, you might be confused about why someone would sell a property rather than selling it. Here are some common reasons why people donate real estate :
● It’s possible that the property owner wanted to leave a legacy or some kind of donation to help others.
● The property owner might be looking for a tax write-off.
● The property owner may want to set up a remainder trust to benefit both the owners’ heirs and charity.
● The most common reason is that people want to get rid of an unwanted property. It’s important to understand that donation of real estate to charity offers many other benefits. It’s not just about trying to get rid of an unwanted property.
There may also be some other reasons why a property owner would consider donating real estate rather than selling. Tax deduction is one of the major benefits. You may even receive a tax deduction up to the highest appraisal value on your property. Good feelings generated from your donation may be another major advantage.
What Steps Should Be Taken To Complete A Successful Donation?
First of all, it is very important to hire a competent tax attorney. You will need the best legal assistance. Your donation needs to comply with all the rules of the IRS, and state laws. In some cases, it is important for the property to be owned for more than one year. This will allow long term capital gains. Sometimes, a partial donation may not qualify for donation under IRS rules. In a partial donation, some part of a larger property is donated.
Secondly, once you have hired legal and tax expertise, you will have to get your property appraised. It will help you determine the property’s current market value. For donation of real estate to charity, the IRS requires a qualified appraisal. Moreover, IRS rules require the property to have a market value of more than $5,000.
After taking these steps, you need to consider the recipient of your donation. It is important to choose an accredited and recognized charitable organization. The charity you choose should wish to accept the donated property. A lot of local non-profits can benefit from your real estate donation.
Most of the time, donation of real estate to charity proves to be the most cost effective and best way to liquidate a property because of various tax benefits. The opportunity to help a cause is an intangible benefit. In tough economic times, more people are seeking financial help. Donating real estate to a charity may be an excellent choice.
Holding on to a Property vs Donating Real Estate
A lot of people are quite surprised to know the number of unwanted properties in an area. People owning these properties find it easier to donate them and receive tax benefits rather than finding buyers for these properties. In some cases, selling a property does not prove to be the perfect way to liquidate. Increasing cost of the real estate may be the primary reason why a person may experience problems finding a buyer.
Due to such problems, a lot of people hold on to idle properties for the lack of smarter or better alternatives. This causes people to incur needless and excessive costs without getting any returns on the investment. Despite all these problems, donating real estate to a charity proves to be the perfect way to get rid of an unwanted property.
It is worth mentioning that donation of real estate to charity has changed the lives of many people around the world. It can help you further a cause, and improve communities in a local or general area. If you are planning to donate your real estate to charity, it is important to consult a professional attorney. He will be able to guide you in the right direction.
Good Donation Site for Property Donations:
Written by: Sue Miller