Real Estate—Outright Gift
You receive a charitable deduction for the full fair-market value of the unencumbered real estate. You may apply the deduction up to 30 percent of your AGI—in the year of the gift—with the five-year carryover provision. You avoid capital-gain tax on the appreciation you have in the property and there are no gift taxes. Because you have removed the property from your estate, you have also reduced your estate taxes.
Please note: The federal estate tax is currently back in effect through the end of 2012. The top tax rate is now 35%, and the exclusion amount is $5,120,000 per person and $10,240,000 per married couple. Any exclusion amount not used by a spouse who dies after December 31, 2010, is portable and generally may be used by the surviving spouse. It is very important that you seek the advice of your estate-planning attorney to determine what changes, if any, need to be made to your existing estate plans.