Real Estate Gifts: Often Overlooked by Donors, Never Undervalued by GBMC

Many GBMC supporters never consider making a gift of real estate to their favorite hospital.  This is not uncommon in the charitable arena, as most philanthropists view real estate gifts as an option only for the wealthiest individuals.  It is true that, on average, people with significant means usually make these types of gifts.  Increasingly, however, many are finding that giving real estate is a sound decision for retirees with even moderate asset levels.

For many people, a large portion of their net worth lies in their home.  Most of these same people would never consider giving up their home, because of all the memories, comfort and sentiment that the familiar, four walls provide.  Although these days, giving real estate usually does not mean giving up the house with which these strong emotional bonds exist.

Giving property can take on many forms, and people who contribute real estate in 2004 usually find large tax benefits from their gifts.  Among the ways to give property are giving a business property, a vacation home, a farm, undeveloped land or entering into an agreement called a retained life estate.  The retained life estate simply involves people transferring ownership of their home to GBMC but continuing to live there for the rest of their lives.  Best of all, if it is done properly, the folks who are making the gift will receive a lifetime of income.

Take, for example, the Baltimore couple who have owned their home for over 50 years.  Bob and Jane are both living comfortably in retirement, but realize that they would be able to enjoy more income if they could tap into the equity in their home.  Not anxious to face any additional debt burden of a reverse mortgage in their golden years, they decide to transfer the title of their home to GBMC with the understanding that GBMC will take possession of the property when the survivor of the couple passes away.

Bob and Jane will receive a tax deduction (up to 30% of their adjusted gross income) in the year of their gift, plus they will receive a guaranteed income stream based on an independent appraisal of their home and their expected lifetimes.  The couple can potentially avoid the sometimes significant capital gains taxes on the property’s appreciation.  They will also enjoy the knowledge that the gifted property will not be considered part of their estates for estate tax purposes.  Finally, Bob and Jane will be able to continue to live in their cherished home for their lifetimes in the knowledge that they are giving back to their community and GBMC with their generous gift.

Of course, the personal financial situations of GBMC supporters are as many as the number of hours each year that our outstanding doctors and staff dedicate to our patients in the Greater Baltimore community.  That is why the Office of Gift Planning at the GBMC Foundation is happy to meet with our loyal supporters and their advisors, at any time to discuss the best fit for possible real estate gifts.

Other ways to give real estate include:  making an outright gift to GBMC, transferring ownership of your property to a Charitable Remainder Trust, gifting a partial interest in the property, engaging in a bargain sale where the difference in the sale price and the appraised value equals the amount of the charitable gift or simply by making a provision in your Will to give your property to GBMC.

For more information about real estate or other planned gifts, please contact John C. Jeppi in the GBMC Foundation Office of Gift Planning at 443-849-3303 or jjeppi@gbmc.org.

This article may not be construed as legal or accounting advice, and should not be relied upon as such.  Please consult your own attorney or accountant for advice regarding your personal circumstances.  The GBMC Foundation maintains a list of competent professionals whom you may retain for such advice.