What Are The Tax Benefits Of Donating Real Estate To A Church Or Charity

What are the​ Tax Benefits of​ Donating Real Estate to​ a​ Church or​ Charity?
Most people think that donating real estate to​ a​ charity is​ for the​ rich. This simply is​ not true. I ​ have worked with individuals,​ charities,​ and small corporations for years with the​ donations process. For many people and companies is​ about the​ able to​ rid themselves of​ unwanted property. They simply want out. They are tired of​ property taxes,​ insurance costs and the​ liability exposure.
The following are the​ rules that apply for real estate donation
Individuals
The following rules apply if​ the​ donated property is​ owned in​ your own name,​ with your spouse or​ other persons if​ you​ have held the​ property for more than one year,​ it​ is​ classified as​ longterm capital gain property. you​ can deduct the​ full fair market value of​ the​ donated property. Your charitable contribution deduction is​ limited to​ thirty percent 30. 00% of​ your adjusted gross income.
Excess contribution value may be carried forward for up to​ five years. if​ the​ property has been depreciated,​ the​ fair market value must be reduced by its accumulated depreciation through the​ date of​ contribution. Fair market value is​ most commonly determined by an independent appraisal.
If you​ elect to​ deduct your cost basis of​ the​ donated property you​ are allowed a​ deduction of​ fifty percent 50. 00% of​ your adjusted gross income. Excesses here again can be carried forward up to​ five years. Which method you​ elect is​ dependent on​ the​ cost basis in​ the​ property donated,​ your tax bracket,​ the​ age and health of​ the​ donor and whether you​ plan to​ make future contributions. Corporate Donors
The following rules apply if​ a​ corporation makes your contribution,​ these rules apply
If you​ have a​ controlling interest in​ the​ corporation and the​ property has been held for more than one year,​ the​ corporation can deduct up to​ ten percent 10. 00% of​ the​ net profit of​ the​ corporation. Excess contribution amounts can be carried forward up to​ five years. the​ fair market value here must be reduced by the​ amount of​ accumulate depreciation. if​ the​ corporate has elected Subchapter S status,​ then the​ contribution allowed will be reported on​ the​ individual shareholders K1 and may be deducted on​ the​ individual return. Partnerships,​ SCorporations and Limited Liability Companies
The following rules apply if​ a​ partnership,​ SCorporation or​ limited liability company is​ making your contribution
The corporation may not claim a​ deduction for the​ property donated. Rather,​ the​ contribution passes to​ the​ individual shareholders on​ a​ prorated based on​ their percent ownership in​ the​ S corporation. the​ shareholder can claim this deduction on​ their individual tax return. the​ same limits and carry forward rules will apply.
Partnerships and limited liability company contribution rules are the​ same as​ an S corporation with one exception the​ partners or​ member can claim a​ deduction even if​ they have no basis in​ the​ partnership or​ limited liability company.
Real estate investing by nature is​ risky. you​ can win,​ lose,​ or​ break even. We cannot guarantee a​ profit or​ loss. We do not provide legal,​ accounting,​ or​ contracting advice.
* Please consult your CPA/Attorney for your specific tax benefit.
What Are The Tax Benefits Of Donating Real Estate To A Church Or Charity What Are The Tax Benefits Of Donating Real Estate To A Church Or Charity Reviewed by Henda Yesti on July 06, 2018 Rating: 5

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