What You Need to Know About Donating Real Estate to a Non-Profit in LA

Are you looking for a way to support organizations you love in Los Angeles? Maybe you have a friend who runs a program you want to be a part of, or you have a beloved non-profit that you want to support. Financial donations are one way to offer support, but they aren't the only way. 

Donating real estate can be a mutually beneficial strategy to support your favorite non-profit organization while optimizing your taxes. Below we have answered some FAQs about donating real estate in Los Angeles to help. 

If you would like to learn more about finding real estate to purchase and donate, or donating a property you already own, we can help. Contact us any time to get started. 

FAQs for Donating Real Estate

What type of real estate can I donate?

Your options for donating real estate to a non-profit are diverse. You can donate vacant lots, historic structures, farmland, commercial buildings, rental properties, and more. If you are wondering about a specific and unique scenario, let us know how we can help. 

What are the IRS rules for donating real estate?

Making sure to follow the IRS rules for donating real estate to a non-profit is essential to avoid future complications and reap the full benefits of the donation. In the rare case that the property is worth less than $5,000, all you’ll need from the nonprofit is a receipt. If it’s worth more than that, you’ll have to make sure to have the charity complete Form 8283.

What are the benefits of donating real estate to a non-profit?

There are multiple benefits of donating real estate to a non-profit. Of course there are the intangible benefits of knowing you have supported a cause that matters to you, leveraging your investments and financial positions to provide necessary backing to an organization you admire. 

Financially, there are also some benefits. Tax benefits from donating real estate include avoiding having to pay capital gains taxes on the property as you would if you were to sell it. Another benefit is being able to deduct this charitable contribution from your taxes. 

If you stand to pay a high amount of capital gains taxes on a property you would like to sell, consult with your tax professional to determine whether it might be more financially advantageous to donate it instead.

What is the process for donating real estate to a non-profit?

Start by identifying a non-profit organization in Los Angeles that aligns with your philanthropic goals and has a mission or focus area you are passionate about. Research and choose an organization that is qualified to receive tax-deductible donations and also has the capacity to accept real estate donations, and confirm with them that they would like to accept this donation.

Before proceeding with the donation, conduct a thorough evaluation of the property. Assess the property's market value, condition, any outstanding mortgage or liens, and potential environmental concerns. This due diligence helps determine the feasibility and impact of the donation. We can help you with this process, connecting you with any professionals you need for appraisal and other assessments.

Next, work with your attorney to draft a detailed donation agreement that outlines the terms and conditions of the real estate donation. You can then move on to the transfer of ownership.

Contact us any time to learn more about donating real estate in Los Angeles. We are here to help you reach your goals and leverage your investments to support your values.