Gifts of Property
Contributions of real estate, both residential and commercial, provide tremendous support for the work of Preservation North Carolina’s Endangered Properties Program. In some cases, PNC has been able to use the proceeds of sales of donated properties for special preservation projects, operations, or building the endowment. In other cases, only through gifts of property interests has it been feasible for PNC to preserve difficult properties (such as extremely deteriorated structures or historic properties with high land values).
There are many reasons donors may choose to make a gift of real estate to Preservation NC: financial and tax advantages; no heirs or heirs with no interest in the property; protection for the property (which can also be accomplished through easements); and a desire to support the continued preservation work of PNC.
Because of PNC’s expertise in finding preservation solutions for complex historic buildings, we are particularly well-suited to accept gifts of real estate, both historic and non-historic. Gifts can be made now or through a planned gift. If the property is historic, Preservation NC will make every effort to ensure that the property is protected by legally binding preservation easements or covenants.
Overview: Gifts of Appreciated Real Estate
When a historic property is donated to Preservation North Carolina, legally binding preservation covenants or easements are attached permanently to the property’s deed to protect it against undesirable demolition, development or alteration. (Gifts of non-historic properties are also welcomed by Preservation North Carolina, though we cannot ensure their future protection through preservation covenants or easements.) PNC then assumes all carrying costs including insurance. PNC seeks potential buyers who are preservation-minded, and who will understand the terms and restrictions of the covenants.
Proceeds from the sale of donated properties are first used to cover the operating costs incurred while holding the property. The remaining funds are either placed in the Endangered Properties Fund to assist with saving future endangered historic properties, or in an endowment fund to support Preservation North Carolina’s work for generations to come. (In some cases with particularly large gifts of property, PNC is able to do both.) If desired, the donor of a gift of real estate can designate the use of the proceeds from its sale for a specific purpose (such as support for the Bellamy Mansion Museum or a special project). PNC can also work with donors to split the proceeds with another organization (such as a church or university). This ensures the property is protected by PNC but enables a donor to support multiple organizations.
Methods of Donation
Once the decision is made to donate a property to Preservation North Carolina, you should work with your financial and tax advisors to consider the type of gift that best accommodates your needs. You may deed a gift of real estate to PNC in the following ways, all of which remove the value of the property from your estate for estate tax purposes:
The donor transfers ownership of the property to PNC immediately. PNC takes full possession of and responsibility for the property until it is sold. Tax benefits may be realized immediately.
|Partial Donation or “Bargain Sale”
The donor sells the property to PNC at a deeply discounted price. The donor can then take a charitable tax deduction of the difference between the appraised value and the sales price. PNC has saved a number of endangered historic properties in this way.
The donor leaves the property to PNC in their will. PNC can supply you with sample language to make including us in your will a simple process.
|Deed of Gift Retaining a Life Estate
The property is donated subject to a life estate so the donor (and his or her spouse or heirs) has full use of the property for life. The donor takes an immediate charitable tax deduction, and a partial interest in the property passes irrevocably to PNC at the time of the donation. The donor (or beneficiary) remains responsible for all taxes, insurance and maintenance of the property while holding the life estate.
Regardless of the method you choose, making a gift of property to PNC may offer substantial tax benefits, including:
• Avoiding capital gains tax on the property’s appreciated value.
• Receiving a charitable deduction from income taxes.
• Removing the value of the property from your estate for estate tax purposes.
The information provided is general and not intended to be comprehensive or specific to your unique situation. Preservation North Carolina strongly recommends that you consult your own financial and legal advisors before making a donation of real estate or entering into a planned gift arrangement.