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Published on: 9/12/2007
Last Visited: 10/16/2007
Chase Magnuson, president of Real Estate for Charities (www.realestateforcharities.com), also suggests checking out the potential recipient on the Web site www.GuideStar.org."Most charities have their tax returns posted on the site along with any derogatory government action taken against them," he says.
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"The donor cannot take both the exemption and gift deduction in this process," reports Chase Magnuson of Real Estate for Charities, my expert on these matters.
Magnuson suggests a more favorable arrangement is possible by having USC or another charity, if you so chose, enter into a "bargain sale" purchase of half your property and exchange the other half for a gift annuity.This way, he says, most, but not all, of your proceeds would be sheltered under the $500,000 family exemption.
"They could then take the untaxed cash and create a second gift annuity that provides them a gift deduction usable against 50% of their adjusted gross income rather than 30% the property equity would allow them," he says."But this only makes a difference should the donors expect to earn around $1,800,000 in adjusted gross income over the next six years.That's what it would take for them to completely use a $600,000 gift deduction."
As you can see, this is complicated stuff, so anyone considering donating their real estate should not do so blindly.Get professional advice.For what it's worth to you, Magnuson says USC has "one of the best groups of professionals with which the donor could be communicating.
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