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You sell real estate to a charity for less than its fair market value. The difference between the fair market value and the sale price can be deducted as a charitable income tax deduction.
Your basis is apportioned between the gift portion and the sale portion. The capital gain recognized in the gift portion is not taxable to you; the difference between the sale price and the basis apportioned to the sale portion is taxable to you as capital gain.
When the Foundation sells the real estate, the proceeds will go to a fund that is created. This fund can be a:
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Donor Advised Fund (advised by children or others you name)
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Field of Interest Fund
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Designated Beneficiary Fund
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unrestricted Community Action Fund
In order to evaluate a potential gift of real estate, the Foundation will work with you to learn the specifics of a particular property, including such things as fair market value, marketability, possible environmental issues and related questions.
The Minneapolis Foundation can provide written guidelines to assist in compiling the necessary information.
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