Appreciated Property Gifts
When appreciated property is sold, the seller must typically pay capital gains tax on the appreciation – the difference between the cost basis of the property and its current fair market value. Cost basis is generally the value of the property when the new owner acquired the asset. If the asset has been depreciated, such as an auto used in business, rental property, or other capital asset, the basis will be reduced by the amount of depreciation.
However, if you make an outright gift of appreciated assets to any qualified charity, you are not subject to capital gains tax. Likewise, when the charity sells the asset, it is exempt from paying capital gains tax. Therefore, outright gifts of appreciated assets, such as publicly-traded securities, real estate, and other usable or readily marketable assets, can be economically advantageous to both the donor and the charity.
Real estate gifts are welcomed by Miracle Farm if the property can be used by our ministry to serve boys or if it can be readily sold and the proceeds used for serving our boys. Miracle Farm will generally not accept real estate gifts that we cannot use, real estate that cannot be readily sold, or real estate that contains environmental hazards.
Agape Ranch urges all prospective donors to seek the assistance of personal legal and financial advisors in matters relating to their gifts, including the resulting tax and estate planning consequences. The information above is intended to provide general information on gift giving and should not be used as specific legal, tax, or investment advice.