Booming Incentives to Donate Real Property in a Busting Economy



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Texas Tech University School of Law Estate Planning and Community Property Journal


Charitable giving declines in times of economic turmoil. However, it is becoming common for individuals to donate real property, especially if there is a tax deduction incentive attached to the donation, during recessions. While the economic incentives are significant, there is also an altruistic reason to donate to charities during times of economic downturn. For one, people are in more need of charity services. Second, there are less people able to donate, so those who can should. For IRC purposes, the amount of the charitable deduction is based on the fair market value of the property. The best type of real property to donate is property not in use that cannot be sold. Thus, the real property owner can at least get a tax deduction on the property. This is true no matter if the real property is commercial, residential, etc. Further, charities are moving towards accepting real property as a charitable donation. Another controversial valuation method is the 561 Exchange Program. This process value both real and person property at a rate higher then market value. Many critics believe this valuation system is vulnerable to abuse. Overall, this system appears to be beneficial, however, it is also dependent on changes in the economic and political climates. However, donating real property does have an economic and chartable advantage verses allowing the property to sit and fall in disarray.



Charitable donations, Deductions, Economic downturn, Gifts, Market value, Real property, Tax


Sarah Rose, Booming Incentives to Donate Real Property in a Busting Economy, 3 EST. PLAN. & COMMUNITY PROP. L.J. 123 (2010).