888-228-7320Real Estate Donation Tax Benefits - IRS Tax Deduction Donated Property
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Real estate donations make good sense for both individuals and corporate donors. The equity from your real estate donation helps us continue to benefit the many commendable causes we support. Real Estate with Causes is here to provide you with the know-how necessary to conduct a real estate donation that optimizes the benefits for both you, the donor, and those we serve.
What Can A Real Estate Tax Deduction Do For You?
Individual donors
These rules may apply if the donated real property is owned in your own name,
with your spouse
or other persons (Please check with your tax professional):
If you have held the property for more than one year, it is classified as
long-term capital gain property.
You can deduct the full fair market value of the
donated property. Your charitable contribution deduction is limited
to various percentages of your adjusted gross income. Excess contribution
value may be carried forward for up to five years. If the property has been
depreciated, the fair market value must be reduced by its accumulated
depreciation through the date of contribution.
Fair Market Value is most commonly determined by an
independent appraisal.
If you choose to deduct your cost basis of the donated property you are allowed
a deduction of fifty percent (50.00%) of your adjusted gross income (Please
check with your tax professional).
Excesses here again can be carried forward up to five years. Which method you
choose to follow is dependent on the cost basis in the property donated, your
tax bracket, the age and health of the donor and whether you plan to make future
contributions (Please check with your tax professional).
Corporate Donors
The following rules apply if your charitable donation of real property is
made by a corporation:
If you have held a controlling interest in the corporation and the property has
been held for more than one year, the corporation may deduct up to ten percent
(10.00%) of the net profit of the corporation (Please check with your tax
professional).
Excess contribution amounts can be carried forward up to five years. The fair
market value here must be reduced by the amount of accumulate depreciation.
If the corporate has elected "Sub. S" status, then the contribution allowed will
be reported on the individual shareholders K1 and may be deducted on the
individual return (Please check with your tax professional).
Partnerships, S-Corporations and Limited Liability
Companies
The following rules may apply if your contribution is being made by a
partnership,
S-Corporation or limited liability company:
The corporation may not claim a deduction for the property donated.
Rather, the contribution passes to the individual shareholders on a pro-rated
based on their percent ownership in the S corporation. The shareholder can claim
this deduction on their individual tax return. The same limits and carry forward
rules will apply (Please check with your tax professional).
Partnerships and limited liability company contribution rules are the same as an
S corporation with one exception the partners or member can claim a deduction
even if they have no basis in the partnership or limited liability company.
(Please check with your tax professional)
IRS
8282 Form: Donor Information Return
IRS 8283 Form: Non cash Charitable Contributions
*Most importantly, your real estate donation of real property will assist the countless programs we support, with a substantial source of much needed funding for the benefit of their cause and our goal of helping those in need.
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