Sale of Appreciated Real Estate


Key Idea: Charitable giving from the sale of real property should be arranged BEFORE THE SALE.

When selling appreciated real property, you can sell the property outright and pay as much as 25 percent in taxes on the gain, or you can gift the property and:

  • Pay no taxes on the gifted percentage of the property
  • Receive a lifetime income on the proceeds from the sale
  • Enjoy lower taxes now
  • Make a wonderful gift to charity at death

A Real Life Example

A donor couple is long-time friends of Young Life and are planning to sell a small tract of farm land. With their old plan they were going to sell and pay more than $100,000 in capital gains taxes.

Their situation:

  • Total estate value of $2.5 million
  • Farm land valued at $500,000
  • Cost basis of $25,000

Their new plan provides:

  • A significant charitable tax deduction used to lower their taxes
  • No capital gains taxes on the sale of the gifted portion of the property
  • A lifetime income stream
  • A wonderful gift to charity both now and at death
Results Proceeds from Sale of Property Taxes Paid on Sale Charitable Gifts Carry Forward Income Tax Deduction
New Plan $175,000 (Now ... Plus)
 
$283,000
(Over Time)
$0

$100,000
(Current Gift)

$225,000
(At Death)

$7,000 (Deductions)
Old Plan $395,000 (Now) $104,500 (Federal and State Capital Gains) $0 $0

Please contact us to learn more.

The information contained herein is for explanatory purposes only and is not intended to be used as tax or legal advice. The Young Life Foundation recommends that you contact a professional tax advisor who can provide you with additional information on how the use of the above techniques and ideas may apply to your personal tax situation.