Three Big Tax Benefits for Donating Your Property to Veterans
Donating real estate to DAV (Disabled American Veterans) isn’t just an incredible way to give back to America’s veterans — it can also provide multiple financial benefits for you and your family.
Here are three great tax deduction benefits for donating your property to DAV:
● Avoidance of Capital Gains Tax: Property owners must pay a capital gains tax on any profits they make selling a property. At the federal level, this tax will range anywhere from 15% to 25%, plus an additional 5% to 13% for the state level. This means that for every $100,000 worth of property donated to charity, you can avoid paying up to $38,000 in taxes.
● Charity Income Tax Deduction: When you make a property donation, you can also benefit from the charitable income tax deduction to offset your income. The deduction amount is based on the fair market value of the property or properties you donate. Therefore, if you donate a $200,000 home, you can receive a $200,000 tax deduction (regardless of the final sales price). While there is a cap on these deductions, you can use any unused portions of the deduction for the next five tax years.
● Charitable Remainder Trust Benefits: If you choose to donate your property to a Charitable Remainder Trust, you can also receive the combined benefit of avoiding capital gains, gaining a charitable income tax deduction and earning future passive income. A Charitable Remainder Trust allows for part of the proceeds generated from the sale or management of your real estate to be given to a charity of your choice and the other part to you or your heirs in fixed amounts for the next 20 years. This can be a massive boost for your retirement nest egg.
Whether your real estate is costing you money in maintenance or taxes or simply going unused, donating it to DAV can positively benefit your finances in multiple ways. DAV accepts any property type — land, farms, homes or commercial properties — in any location, as long as there is equity.
Plus, if you owe back taxes, have a mortgage balance or have deferred maintenance, it isn’t a problem. As long as there is sufficient equity in the property, DAV will pay off all loans, liens, commissions owed and all closing costs.
And, when you donate your property to DAV, the proceeds of the sale go directly to supporting DAV’s life-changing programs for veterans who served and sacrificed for our country.
Find out more about DAV property donations by visiting dav.org/real-estate-donation or by calling 844-277-4663.
This article is for informational purposes only and does not constitute formal advice. Individual tax situations may vary so please contact your tax advisor if needed.