Real estate can be one of the strongest assets for you to further the mission of your church. Your church will be extremely grateful for your generous intentions. Be prepared, however, that there are complexities involved. Therefore, both you and your church with the help of qualified advisors must consider and review extremely carefully all facets of the transaction.
Some - but by no means all - of the first considerations and steps to your church accepting your generous offer of a piece of real estate follow. The real estate should:
- have a free and clear title (report supplied by you, the donor)
- be readily marketable
- be unencumbered by mortgage or liens
- be free of environmental complications (most notably problems as asbestos, oil or other fuel spills or tanks, or other potential contaminants
- have an environmental audit performed to ensure that your church family does not incur significant unforeseen liabilities
- have disclosed any unforseen carrying costs or restrictions (such as recurring bills for maintenance or memberships...)
- be professionaly appraised no more than 60 days prior to the gift date (to meet valuation requirements and establish a fair market value for the the credit for the donor to realize for tax purposes)
Deductibility
If the property has been held more than 1 year, you receive a charitable deduction for the appraised value, regardless of the amount you paid for it. You may deduct up to only 30% of AGI in any one year, although you may carry the unused portion of the deduction for any of the next five years.
Capital Gains
You pay no capital gains taxes on appreciation if your church sells the property.