A gift to Phillips Academy—without touching your bank account? Consider a gift of real estate, such as a personal residence, vacation home, farm, commercial property, or undeveloped land. This generous gift will directly support the Andover experience, wherever on campus your passion lies. And by giving real estate, you earn tax-smart benefits for yourself too. When you give Phillips Academy appreciated property you have held longer than one year, you qualify for a federal income tax charitable deduction and you may minimize or eliminate capital gains tax. You also free yourself of the burden of the property’s maintenance.
Another benefit: You don't have to deal with the hassle and expense of selling the property. You can deed the property directly to Andover or ask your attorney to add a few sentences in your will or trust agreement, so you can rest easy knowing your gift will get right to work for Andover.
Due to the complexities of gifts of real estate, please contact the Office of Gift Planning before making any legal/title changes to property you own. Thank you.
Ways to Give Real Estate
You can give real estate to Andover in the following ways:
When you make a gift today of real estate you have owned longer than one year, you qualify for a federal income tax charitable deduction equal to the property's full fair market value. This deduction lets you reduce the cost of making the gift and frees cash that otherwise would have been used to pay taxes. By donating the property to Phillips Academy, you also eliminate capital gains tax on its appreciation.
When you transfer real estate to your donor advised fund, you avoid capital gains taxes and qualify for a federal income tax deduction based on the fair market value of the property when you itemize your taxes.
Perhaps you like the tax advantages a gift of real estate to our organization would offer, but you want to continue living in your personal residence for your lifetime. You can transfer your personal residence or farm to Andover but keep the right to occupy (or rent out) the home for the rest of your life. You continue to pay real estate taxes, maintenance fees, and insurance on the property. Even though Andover would not actually take possession of the residence until after your lifetime, since your gift cannot be revoked, you qualify for a federal income tax charitable deduction for a portion of your home's value.
You can contribute any type of appreciated real estate you've owned for more than one year, provided it is unmortgaged, in exchange for an income stream for life or a term of up to 20 years. The donated property may be a residence (a personal residence must be vacant upon contribution), undeveloped land, a farm, or commercial property. Real estate works well with only certain variations of charitable remainder trusts. Your estate planning attorney, who will draft your trust, can give you more details.
When you make a bargain sale, you sell your property to our organization for less than what it is worth. The difference between the actual value and the sale price is considered a gift to Andover. A bargain sale can be an effective way to dispose of property that has increased in value, and it is the only gift that can give you a lump sum of cash and a charitable deduction (when you itemize) at the same time.
This gift can be a wonderful way for you to benefit Andover and simultaneously transfer appreciated real estate to your family tax-free. You should consider funding the charitable lead trust with real estate that is income-producing and expected to increase in value over the term of the trust.
An Example of How It Works
Janet purchased a rental property years ago and has watched it grow steadily in value. Still active in her career and traveling frequently, she is beginning to find management of the property more and more of a hassle. Janet sees this as an opportunity to give her rental property to a charity that is important to her while realizing valuable tax benefits.
Janet avoids capital gains tax on the appreciation and qualifies for a federal income tax charitable deduction for the property’s fair market value. Janet loves knowing that the gift of her property will make a big difference supporting our mission.
Make a Gift Today
Learn more about the many ways to use real estate to support Phillips Academy in the guide Ways to Donate Real Estate.