There are four common ways to transfer real estate for charitable purposes. Each offers its own benefits for the donor and the Hospital.
- Outright Gift of Property
You transfer ownership of the property to the Hospital and receive a charitable income tax deduction for the full appraised value of the property (up to 30% of adjusted gross income. The “remaining” deduction is carried forward for up to five additional years.) You avoid capital gains taxes on any increase in the value of the property. If the property is transferred by will, there will be an estate tax charitable deduction.
Saratoga Hospital Foundation typically sells donated property and invites donors to let us know how they would like the proceeds to be used.
2. Retained Life Estate
You transfer ownership of the property to Saratoga Hospital Foundation, but retain the right to live in/on the property for the rest of your life. You receive a charitable income tax deduction for a portion of the value of the property. If you decide to relinquish the right to live in/on the property, at that time you receive an additional charitable deduction. Retained life estate gifts are irrevocable.
3. Charitable Remainder Trust: Net Income Unitrust
You transfer the property to a trust and receive an immediate charitable income tax deduction for a portion of the value of the property. The trustee sells the property and reinvests the proceeds to provide you with lifetime income. After your death, the remaining trust assets are given to Saratoga Hospital Foundation to be used in accordance with your wishes.
4. Bargain Sale
You sell property to Saratoga Hospital Foundation for less than the appraised fair market value and receive a charitable income tax deduction for the difference between the fair market value and the sale price. However, you still face some capital gains taxes. You no longer have use of the property, which passes to Saratoga Hospital Foundation immediately.