When You Donate Land You Can Save on Taxes
Not every eligible charity wants land. For some charities, land is a burden since, if they don’t have a use for it, they may need to pay to own it and to sell it. Real Estate with Causes, on the other hand, is in the business of owning and using land and would love to take your land donation.
Keep in mind, before they can accept a donation of land, it must have clear title. If you have any ownership issues related to inheritances, you may need to work along side their helpful representatives to resolve the issues. Finally, since you can only deduct the fair market value of your land, you will also need to have it professionally appraised to establish a value in order to receive the best tax deduction.
With Real Estate with Causes, transferring the land is relatively simple. You will work with the charity’s legal team to draft a deed, which you give the charity ownership of the land. Once you have made the donation, you enter its value with your other charitable contributions on Schedule A of your Form 1040 tax return. You will also have to attach Form 8283, which is where detailed information on your non-cash contributions are found.
Limitations and Exceptions
The IRS applies a several limitations that can cap the value of your land donation, whether you donate real estate or anything else. You must donate to an IRS-recognized charity. Real Estate with Causes is a part of an IRS approved 501(3)3 charity organization, you can feel confident that your charitable land donation counts as a tax deductible.
Your deduction could be capped at a certain percentage of your adjusted gross income per year. If you exceed the cap, you can carry any additional value forward, up to five years.
Transferring the Land
You will need to transfer ownership of your land to the charity, which is a legal maneuver you may want to consult your attorney about. You may need to find out if you’re required to get an appraisal of your land to determine its fair market value, witch is only typically needed if the value of the donation exceeds $5,000. Qualified appraisers must meet certain guidelines, such as their certification requirements.
Other Ways To Donate Real Estate
Real Estate with Causes can also help you out with other types of real estate donations such as:
