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. 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.
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.
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 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!
Deborah L. Miller, JD is the director of planned giving at the West Virginia University Foundation.