Gifts of Real Estate and Personal Property
Outright Gift of Real Estate
Almost any type of real property, a personal residence, a farm, a vacation home, a commercial building, or an undeveloped parcel of land can be the subject of an important gift to Dickinson College. Gifts of real estate may be made either outright or through a tax-advantaged life income vehicle. You may gift all or a percentage of your real property to the College, and your gift may be given during your lifetime or through your will.
If the property is held more than one year and given outright or through a trust, you will generally avoid any tax on the gain. Also you will reduce your taxable estate by the value of the gift and its future appreciation. You as owner of the property will receive a current charitable contribution deduction for 100% of the fair market value appraisal of the property.
Gifts of Farms and Homes (Retained Life Estate)
If you own your home, farm, or a vacation home, you can make a gift of the property, get an immediate income tax deduction, and continue to use the property for as long as you wish. You accomplished this by simply giving the property to the College, but retaining the right to use it for your lifetime. You can continue to live in the home, work on the farm, have a tenant work the farm, or enjoy your vacation cottage. As you continue to enjoy the benefits of the property, you are responsible for its maintenance and taxes. Only after your death will the College assume the usual ownership rights in the property.
By setting up your gift now, rather than in your will, you will receive an immediate income tax deduction for the present value of the College's future right to receive the property. You also can give an "undivided interest" in property that you own and receive an immediate income tax deduction. For example, you could make the College the owner of a 50 percent interest in your vacation home. The College's benefit is that, when the property is sold, the College will receive 50 percent of the proceeds. The sale can be during your lifetime or even after your death. And the real benefit to you is a deduction for about 50 percent of the value of the gift property. The deduction will reduce your current income taxes thus increasing your spendable income.
You may make a gift of property by selling it to Dickinson College using an arrangement called a bargain sale. This gift plan is helpful to both the benefactor and the College in the right circumstances. However, bargain sales involve an expenditure on the part of the College, and it is used less frequently than other gift plans. Bargain sales are appropriate when a benefactor has property to benefit the College but wants to keep a portion of the proceeds from the sale of the property for individual benefit. Donors might want to consider this method if the value of the property exceeds the amount you wish to give or if it is not practical or economical to divide the property.
The difference between the property's fair market value and a purchase price paid by the College is a gift which gives you a charitable income tax deduction.
We encourage you to consult with your advisors and the College about the benefits and implications of any bargain sale gift.
Individuals who have enjoyed collections of art, rare books, stamps, antiques, or manuscripts during their lifetime often hope that others will learn from and appreciate them well into the future. These are all examples of gifts of personal property.
You may, of course, give an item whether or not it has increased in value since you purchased it. A gift of personal property made during your lifetime entitles you to the benefits of both an income tax deduction and a reduction in taxes on your estate.
To receive these favorable tax benefits on lifetime gifts of personal property, the use of your gift must relate to the purposes of the College. For example, a painting given to the Trout Gallery for its permanent collection, or a volume given to the College's library are used for related purposes. Gifts of personal property must be reviewed and accepted before a transfer of property can be made.
As with any gift, the development staff will be happy to discuss how to maximize your gift of personal property to benefit both you and the College.
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