Michael Afflitto, CAP®
Southern New England Division
855 Asylum Avenue
Hartford, CT 06105
Toll Free: 1-888-468-5356
Tel: 860-702-0070 Direct
Whether it's embracing the homeless, uplifting the abused or abandoned, training and mentoring the disadvantaged, providing character building programs for youth, or assisting the displaced or elderly, The Salvation Army's goal remains the same: serving the most people, meeting the most needs, DOING THE MOST GOOD!
Many financial planners would agree that real estate has been a sound investment over the years. Today, many people own long-term, highly appreciated real estate. In addition to a principal residence, they may own a second home or a vacation property they no longer use, or investment property such as condos or apartment buildings. In many cases they are looking for tax efficient ways to pass along the property or convert it into an income stream.
If you are one of these property owners, you may want to consider the charitable giving options available to you. Often you can unlock the earning potential of the property, create tax savings, and at the same time, make a substantial contribution to further the charitable work of The Salvation Army.
Before looking at creative ways in which both you and the Army can benefit, consider the real estate you own — a personal residence, vacation home, farmland, rental or investment property, office building, undeveloped land, inherited property . Once you have clearly defined your goals, you will be in a better position to select the gift option to best fit your needs. Let’s look at some of the possibilities.
When you make an outright gift of real estate you can claim an income tax deduction for it’s current fair market value. Your deduction can be claimed in the year of your gift and you have five subsequent years to claim any excess deduction that exceeds the deduction limit. You avoid any capital gains tax on a gift of long-term appreciated property, and donated property is removed from your estate, thus bypassing any potential federal estate tax.
You can transfer real estate through your will or trust by designating the property as a bequest. While such a designation does not generate any tax savings, bequests to charity from a will or trust can qualify for an unlimited estate tax charitable deduction.
By funding a CRT with real estate, you can postpone or spread out capital gains tax liability. The trust invests the proceeds from the sale of real estate in a diversified portfolio of stocks, bonds and other investments. The trust will pay an income to you (and/or others designated by you) for life, or for a term of up to 20 years. You receive an immediate income tax charitable deduction for the present value of the Army’s remainder interest and reduce your potential estate tax liability by removing the asset from your estate. Click here to read more about Charitable Remainder Trusts.