Virtually any charity will accept a highly
saleable property as a gift. As with all major donations, a recognized expert
must certify the value of the property, but the paperwork is not much more
tedious than what we encounter when selling a house. The transfer of ownership
immediately removes the asset from our taxable estates and the charitable
deduction can be taken over as many as five years to avoid possible snags, such
as triggering the alternative minimum tax.
TOP VIEW
Donating unwanted property to our favorite charity allows us to reap
substantial tax benefits and make philanthropic use of assets that have
appreciated greatly in value in recent years. But charities are not in the
property management business; they seek assets that can be easily sold, and so
are reluctant to accept undeveloped land or business properties. Alternatives to
outright gifts exist, which may provide us with a stream of income or the
ability to continue to live in our donated properties for years to come. |
However, few philanthropic
organizations are in the real-estate management business. They generally want to
sell these assets quickly to generate cash to support their work. More than a
few would-be land donors have had rude awakenings when charities proved
unwilling to accept their gifts of undulating country acreage. Others have
assumed they might unload a hard-to-sell piece of land on a worthy cause,
thereby escaping the property taxes. It can be especially tough to give away a
commercial building or raw land; both generally take a long time to sell. By
far, charities prefer donations of single-family homes with fashionable
addresses.
Pristine Properties
Conservation groups occasionally make an exception for
truly remarkable properties. In 1994, Richard Wilson, now 73, and his wife,
Jean, donated 245 pristine acres of scenic acreage near Flagstaff to the Nature
Conservancy. The Hart Prairie Preserve is thick with old growth ponderosa pines,
rare wildflowers, elk, deer and more than 40 species of birds. Wilson’s parents
bought the property, now worth between $2.5 million and $3.5 million, in the
1920s and built a family compound of summer cabins. “It’s just spectacular,”
says Anne Nash, the Conservancy’s director of complex gifts, “but fewer
properties than you might think qualify for that kind of preservation, and even
fewer charities are qualified to accept them.”
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