Working with Advisors
Appreciated real estate provides one of the most tax efficient vehicles for making charitable gifts, and one of the most underutilized. Like gifts of appreciated securities, gifts of appreciated real estate provide the maximum income tax deduction relative to other gift options. Yet very few households use real estate assets when making charitable gifts – a missed opportunity to optimize their giving using what is typically one of the client’s most important assets.
The Legacy Property Fund offers a unique opportunity for your clients to get more value, and more satisfaction, out of a major illiquid asset. The Legacy Property Fund also offers superior flexibility - flexibility unmatched by other real estate gifting options. Your clients will have wide latitude in gift size: they can donate part or all of their property’s value. Any transaction can generate a gift of no less than 3-5% of the sales price. And unlike most real estate gifting programs, KCT allows the donor to designate gifts to multiple charities, spreading their impact across the organizations they care about most.
Tax- Efficient Giving
Compared to gifts of cash, Legacy Property Fund donations offer a more tax-efficient way to give, providing the full, higher value of the asset at the time of the donation, rather than a gift reduced by related taxes and transaction costs. Like gifts of appreciated securities, gifts of appreciated real estate allow the donor to avoid capital gains tax, thereby increasing their gifts by 15% and maximizing their income tax deduction to the full value of the donation. LPF gifts also provide a second tax advantage - an income tax deduction on the transaction costs associated with the sale, which can be substantial.
In contrast to many charitable giving programs, LPF donations of real estate do not require that the entire asset be given. Your clients can donate all or part of their property, at their discretion. And they can direct the gift to as many charities as they wish, broadening the impact to more causes they care about. The IRS has required that a share of each transaction be reserved for KCT’s charitable purpose of conservation. Any amount above that 2% is at the donor-directed to charities of their choice.
A No-Cost, Turn-Key Solution
KCT makes the donation process simple and convenient; all liability and transaction details are handled for you and the client. There are no charges; our costs and the IRS required conservation contribution are covered by the tax savings. We develop a customized donation agreement with your client, you and legal counsel, work with their real estate agent on the sale, and work with you to answer any questions you may have on how this can be integrated with your client’s overall financial plan. KCT then handles all aspects of the sale, removing the tiresome hassles of the transaction.
Call Us When You Need Us
KCT has its financial, tax and legal team ready to work with you. We provide the expertise and the non-profit standing to make philanthropic real estate transactions successful. Working closely together, we can help design and implement a customized strategy to realize clients’ personal goals. Many charities are not equipped to handle these transactions without assistance such as that provided by the Legacy Property Fund. We deliver, by unlocking the value of real estate assets and transforming an ordinary house sale in to an extraordinary event.
Call us to find out how your clients can benefit from this flexible, tax-advantaged option.