Real Estate

When appreciated real estate is gifted, capital gains may be completely avoided and the full fair market value of the property deductible as a charitable contribution.  The IRS currently allows you to deduct the full fair market value of the property up to 30% of your adjusted gross income for the year.  Any amount over that ceiling can be carried forward for future deductions, for up to five years, subject to the same percentage limitations.

Bargain Sale

You may have property that has appreciated in value, but you only want to give part of that value to the church.  You may wish to consider a "bargain" sale of the property for less than its fair market value (usually your cost basis).  You thereby receive back your original investment, while getting a charitable deduction for the donated difference.  You should note, however, that some of the cash recovered may be treated as capital gain.

Gift of a Remainder Interest in a Residence or Farm

A special provision of the tax law allows an immediate income tax charitable deduction for a gift of a remainder interest in your home or farm.  You retain an absolute right to occupy the home or farm for your life (or you can give family members this right).  The property passes to the church only after termination of the life estate.  The immediate charitable deduction allowable for this future gift is the present value of the ministry's right to receive the property at some later date.  The age of the life tenant is the primary factor in determining the present value of the deferred interest and the allowable charitable deduction.