Donors may consider giving real estate as a way of making a substantial gift to Foxcroft Academy. Almost any type of salable real estate can be used to make a charitable gift. The specific types of property that can be given include homes — primary residences, vacation or second homes — condominiums and shares in cooperative apartments, undeveloped land, rental property, apartment buildings, commercial buildings, farms, ranches and forest land, and mineral rights. The property should, however, be unencumbered as mortgaged property can pose practical problems for the Trustees of Foxcroft Academy and might result in adverse tax consequences for the donor. The charitable deduction that can be claimed for a gift of real estate is based upon the fair market value of the property as determined by an independent appraiser.
In addition to giving real estate outright or by bequest, there are two other ways of giving real estate: by means of a charitable remainder trust and by means of a retained life estate. For a charitable remainder trust funded with real estate, ownership of the property is transferred by deed to the trust. The trust then sells the property, invests the proceeds and provides the designated beneficiary(ies) with annual income for life or a term of years. Because the trust is tax exempt, it incurs no capital gain tax on the sale and thus the entire sale proceeds (net of sale expenses) can be invested on behalf of the income beneficiary(ies). The principal of the trust is transferred to the Trustees of Foxcroft Academy only after the death of the income beneficiary(ies) or the end of the term of years.
A retained life estate enables a donor to make a gift of all or some portion of a personal residence or farm to the Trustees of Foxcroft Academy, and retain the right to live in it for life or a term of years. A life estate can also be created for another’s lifetime. Responsibility for obligations pertaining to the property such as maintenance, insurance and taxes remains with the life tenant. A charitable income tax deduction is available to the donor for the value of the Trustees of Foxcroft Academy’s remainder interest based upon the appraised value of the property.