A gift of real estate can be a very efficient way for you to support Gonzaga University.
By gifting real property that has been held at least a year and a day, you are entitled to a charitable tax deduction for the fair market value on the date of the gift and will bypass the capital gains tax due on the appreciation.
If you have highly marketable mortgage-free property that you would like to donate to the University, you can choose among several gift options:
Outright Gift of Real Estate:
The simplest way to transfer real estate is to do so outright and involves deeding the property to the University which is subsequently sold. If the property is classified as a long-term capital asset, the donor will be entitled to an income tax deduction for the full market value. In addition, the donor will not be liable for capital gains tax on the transfer, since the property was donated rather than sold.
A bargain sale is a sale of property to Gonzaga University for an amount less than the property's current fair market value. The spread between the fair market value of the property over the sales price represents the gift element. The bargain sale price may be paid in a lump sum or installments. Bargain sales are negotiable with the donor, however sales involving a gift interest of less than 50 percent of the property's fair market value typically are not accepted. The donor will be asked to bear the cost of an appraisal.
Retained Life Estate:
In this case, ownership of the property is transferred to Gonzaga University, but the donor retains the right to use the property for his/her lifetime. Upon the death of the donor, the University takes full possession of the real estate and sells it. The donor will be asked to bear the cost of the appraisal and upkeep of the property (e.g. taxes and maintenance) while he/she lives in the residence.
Real Estate Funds a Charitable Remainder Unitrust:
If a donor wishes to deed property to a charitable remainder trust, with the understanding that the property will be sold and the proceeds used to fund the trust, income will be generated for the donor for his/her lifetime. The donor bears the costs of the appraisal and upkeep of the residence until the property is sold by the trust. At the death of the donor or after a term of years, the remaining assets in the trust pass to Gonzaga University.
When you are considering a gift of real estate, keep these considerations in mind:
- We will gratefully review your gift offer and evaluate the condition and marketability of the proposed real estate before accepting your gift.
- The IRS requires donors of real estate to secure an independent appraisal to establish the fair market value of the property. We can assist you in following the IRS procedures for this appraisal.
For more information on gifts of real estate to Gonzaga University, please contact:
Office of Planned Giving
502 East Boone Avenue
Spokane, Washington 99258-0098
Toll Free: 800.388.0881