Real Estate

(includes farms, land, second homes, investment properties)

Appreciated real estate is best to give because capital gain is avoided. Federal income tax deduction in the year the gift is made for the entire fair market value of the real estate (subject to 30% of donor's adjusted gross income - any "excess" can be carried over for up to five years). Also the donor's taxable estate is reduced.

Example: Donor purchased undeveloped land some years ago as an investment for $10,000. Today it is worth $100,000. If donor sells land, he/she is liable for the capital gains tax due on the $90,000 gain. The 28% federal income tax on capital gains will be $25,200 (there could be state income tax on the capital gains as well). By donating the land to the UNA Foundation, donor can claim a $100,000 charitable deduction. Assuming donor has adjusted gross income for the year of $140,000, he/she may claim $42,000 ($140,000 X 30%) as a deduction this year and can claim the balance over the next five years. Assuming donor is in a 36% federal income tax bracket, his deduction saves him $15,120 ($42,000 X 36%) in federal taxes this year.