Planning Ahead
Deborah Miller, JD, Sr. Director of Planned Giving, West Virginia University Foundation
Land is a coveted and scarce
asset in many parts of the
world. In the United States, the
average family’s most valuable
asset is its home.
To carry out a special
purpose they have in mind, some people decide
to donate real estate to a favorite charitable
or educational organization, such as the West
Virginia Farm Bureau or the WVU Foundation.
There are a number of ways to do that. Each will
earn an income tax deduction that can be used for
up to six years.
manage it. They can retain the income stream (and
possibly increase it) through the donation but get
rid of the “headaches.” It is also an option chosen
when moving to a smaller home during retirement.
Equally important is the benefit the
organization will receive from your gift. The
property can be used by the nonprofit “as is” or
it can be sold to fund a program or purpose that
you feel is appropriate. Think of all the good you
can do!
That’s good planning.
One option is to donate the property outright
for the organization’s immediate use or for sale by
the organization so that the proceeds can be used
to further its mission. That allows you to see the
benefit of the gift, of course.
Another possibility is to donate a “remainder
interest.” That means that the owner retains all
lifetime rights and duties (such as maintaining
the property), but the next owner will be the
charitable organization.
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This often works well when none of the heirs
will be able to use the property after the owner
dies. Using this method to make a charitable gift
relieves the family of the effort of selling it.
Donating a primary residence, farm,
vacation home or condo this way merely requires
a new deed to transfer the remainder interest to
the nonprofit.
A third option is to use real estate to create a
gift that will pay income to the owner or to others
and avoids the capital gain taxes that would be
owed from selling the property.
This is often an attractive choice for those
who own rental property but no longer want to
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West Virginia Farm Bureau News 23