The PHJC Volunteer Program accepts multiple types of property for our benefit, including residential, commercial, farm and ranch land, forest land, and oil and gas interests.
We evaluate all potential gifts of real estate for marketability and potential environmental concerns and ask donors to supply detailed information on the property before accepting the gift.
When you donate property, you can receive financial benefits and know that you’ve made a difference. Leaving property to heirs can create an estate tax liability and could force the sale of other assets that might otherwise appreciate. By donating property, you avoid these liabilities and hassles. Most importantly, you avoid capital gains taxes so that more of the proceeds can fund your legacy at the PHJC Volunteer Program.
There are four different ways you can give property:
Outright Gift
An outright gift of property is the fastest real estate gift you can make an impact. For properties you’ve held for more than one year, immediate benefits include:
- A charitable income tax deduction for the property’s full fair market value as substantiated by a qualified appraisal.
- Avoidance of capital gains taxes on the property’s appreciation.
- Bypassing the hassle of selling the property.
- Eliminating the burdens of property ownership, such as insurance costs, property taxes, rent collection and maintenance.
- A reduction of your taxable estate.
Bequest
Gifts by will or living trust are a popular and flexible way to invest in the future of PHJC. You might consider a bequest if you would like to continue enjoying ownership of your property during your lifetime and reduce your estate-tax liability. Benefits include:
- Reduced estate-tax liability since you remove the property from your estate.
- Continued ownership so that you can enjoy your property during your lifetime.
- Flexibility, as bequests, can be easily created or changed at any time.
Charitable Remainder Unitrust
With a charitable remainder unitrust (CRUT), you can use your property to create a trust that will eventually benefit the PHJC Volunteer Program. The trust provides you and/or your beneficiaries payments during your lifetime(s). Once your unmortgaged property is transferred to the trust, the trustee sells the property and invests the proceeds. The invested proceeds provide you or any recipient you name with payments for life or any length of time up to 20 years.
Tax law requires annual distributions to the income beneficiary of a CRUT equal to a minimum of 5% of the trust value. When the trust ends, the PHJC Volunteer Program receives the proceeds and works following the terms of your gift agreement to impact. Benefits include:
- Payments for life.
- An immediate charitable income tax deduction.
- Avoidance of up-front capital gains taxes.
- Eliminating the burdens of property ownership, such as insurance costs, property taxes, rent collection, and maintenance.
Retained Life Estate
A retained life estate allows you to make a lasting contribution and enjoy significant tax advantages, all while maintaining your current lifestyle. With this method, you can gift property to the Foundation and retain the right for you and/or a designated beneficiary to live on the property during your lifetime or that of your beneficiary—and still receive a charitable income tax deduction. While you deed the home or property to the Foundation now, the Foundation will not take possession of the house until after your lifetime or that of your beneficiary.
This arrangement can be made with any personal residence, vacation home, farm, ranch, or timberland. You will still be responsible for property maintenance, insurance, and taxes, but you will receive any income generated from your property, including rent. You can also move out permanently at any time. If at some point you wish to terminate the life estate prematurely, there are three resulting options: You can contribute the remainder interest and qualify for an additional charitable income tax deduction; transform the property into an income-producing property and receive the income; or share in the proceeds of the property’s sale. Benefits of a retained life estate include:
- An immediate charitable income-tax deduction because the gift is irrevocable.
- Reduced estate-tax liability since you remove the value of the gift from your taxable estate.
- Lifetime use of residence or farm/ranch.