Unlocking Generosity: How donating real property can make a lasting impact

A gift of real estate can be a charitable strategy with many benefits to you as the donor and to the receiving organization. Gifting real property to a charitable organization, whether it be a primary residence, second or vacation home, a commercial building or rental property, or even unimproved land, can provide numerous tax advantages and be a flexible option allowing you to make a larger gift than you may have thought possible.

The most basic real estate gift is an outright gift of property. For properties you have owned for more than one year, immediate benefits include a charitable income tax deduction for the property’s full market value. Donating the property also eliminates capital gains tax on its appreciation. Outright gifts to Washington University can have an immediate impact as well, as the proceeds can be used right away to benefit students, faculty, research, or programs. This type of gift provides the largest tax deduction and allows you to see the proceeds put to good use in your lifetime.

Another option for gifts of real estate is to use the property to fund a charitable remainder trust (CRT). Through this arrangement, you or a loved one can receive payments for life or a term of years from the trust once the property is sold. The remainder of the trust can be designated for a specified purpose at WashU to be received after the passing of the beneficiary or at the end of the trust term.

Real estate can also be gifted to charity through an estate gift, such as by transfer on death deed. This helps avoid having the real estate go through probate. As is true with all gifts of real estate to WashU, the university will take care of the sale of the property.

Another option when considering a gift of real property is a retained life estate gift. For example, gifting a property like a primary residence or vacation home through a retained life estate gift conveys the property to Washington University by deed, but you retain use of the property during your lifetime. This type of gift can generate a substantial charitable tax deduction without donating liquid assets or affecting your lifestyle. These gifts generally include a binding agreement between you and WashU that you will maintain the property during your lifetime, including paying for insurance and real estate taxes. One of the main benefits of this type of gift is that after your passing, the burden of selling the property will not fall to your loved ones, it will be handled by the university.

If you would like more information on gifts of real property, contact the Office of Planned Giving at Washington University. As always, it is best to discuss charitable gifts with your tax and legal advisors, who can help you with preparation of necessary transfer deeds.