Beyond Cash: Donating Appreciated Real Estate

By Alan Beugg, CFF 

Why Consider Donating Appreciated Real Estate? 

If you own real estate that has appreciated in value over time, donating it to Children’s Hospital Colorado Foundation can offer potential benefits, while supporting a meaningful cause: 

  • Reduce or Eliminate Capital Gains Taxes: By donating your property directly, you may avoid paying capital gains taxes that would otherwise be due upon its sale. This can be a substantial tax saving, particularly for properties you have owned for many years. 
  • Receive an Income Tax Deduction: You may be eligible to claim a charitable income tax deduction for the fair market value of your donated property (subject to certain limitations based on your adjusted gross income and the type of charity). 
  • Simplify Estate Planning: Donating real estate during your lifetime can reduce the size and complexity of your taxable estate.
  • Support Pediatric Health: Your donation can provide vital resources to Children’s Colorado and a mission you are passionate about, leaving a lasting legacy. 

Understanding the Methods of Donation 

There are several ways to donate appreciated real estate, each with its own nuances and potential benefits: 

  • Outright Gift: Transfer full ownership of the property directly to Children’s Colorado. You may receive an income tax deduction based on the fair market value (up to 30% of AGI for appreciated property), with unused amounts often carried forward for five years. 
  • Charitable Remainder Trust (CRT): Contribute your property to an irrevocable trust, retain income for a set period and receive a deduction based on the value passing to charity — potentially deferring capital gains taxes. 
  • Charitable Lead Trust (CLT): Place your property in a trust that pays income to Children’s Hospital Colorado Foundation for a period, then transfer remaining assets to your heirs — offering possible gift or estate tax deductions. 
  • Bargain Sale: Sell your property to Children’s Hospital Colorado Foundation below market value; the difference qualifies as a deductible charitable gift, with capital gains tax only on the sale portion. 

We’re Here to Help  

Donating real estate to charity can have complex legal and tax implications. We strongly recommend consulting with your attorney and tax advisor and partner with our team to appropriately consider your individual circumstances and achieve your philanthropic goals.  

If you have any questions or need guidance on tax savvy ways to support Children’s Hospital Colorado, please reach out — we have the expertise to help! 

Kendall Córdova
Vice President, Philanthropy
Children’s Hospital Colorado Foundation
kcordova@childrenscoloradofoundation.org
303-875-4432

Alan Beugg, CFF is Principal/Senior Wealth Manager at IFAM Capital and volunteer with the Children’s Hospital Colorado Foundation’s Legacy Planning Advisory Council, a group of professional advisers who educate the public on tax-wise and values-based financial planning and the impact philanthropy has on Children’s Hospital Colorado.  

Information provided is general and educational in nature and should not be construed as legal, accounting, or tax advice. Every taxpayer’s situation is different. Rules and regulations regarding tax deductions for charitable giving vary, and laws of a specific state or laws relevant to a particular situation may affect the applicability, accuracy or completeness of the information provided. Please consult an attorney or tax advisor regarding your specific legal or tax situation prior to taking any action based on this information. 

Kovitz Investment Group Partners, LLC (“Kovitz”) DBA IFAM Capital. IFAM Capital is a division of Kovitz, a registered investment adviser with the Securities and Exchange Commission (SEC). SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the adviser has attained a particular level of skill or ability.