Commercial Investment Real Estate is the magazine of the CCIM Institute, the leading provider of commercial real estate education. CIRE covers market trends, current developments, and business strategies within the commercial real estate field.
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Bargain sales are another option whereby the diff erence between the market price and the sales price is a tax deductible giſt . T ere- fore, a donor can receive part of the equity and at the same time have a tax deduction. Charitable remainder trusts can be structured where the real estate is utilized as a funding source. With CRTs, the donor deeds the prop- erty into an irrevocable trust and receives an income stream; upon termination of the trust, the charity receives the remaining assets. T rough a CRT, the corporation or individ- ual avoids capital gains taxes and receives a tax deduction and cash fl ow. Bequests and retained life estates are estate planning meth- ods that can also ultimately benefi t the charity. Although philanthropic intent should be an overriding factor in any charitable dona- tion, several other benefi ts can accrue to a donor, such as relief from capital gains taxes; reduction of federal, state, and transfer taxes; elimination of management responsibility; and potential for an income stream. From a real estate broker's standpoint, there are also many potential benefi ts. For charitable donations of real estate, brokers can earn fees through the normal commis- sion process or on an hourly basis, depending upon the scope of their services. Working with charities also can provide marketing opportunities and referrals, along with posi- tive public relations exposure. T ere are many individuals, investors, and corporate real estate professionals who are faced with non-productive real estate assets that are diffi cult to move. And, even though a certain value can easily be justifi ed, the ultimate sales price may refl ect a signifi cant discount. T e charitable giſt ing of that real estate may actually be the best exit strategy when weighing such considerations as tim- ing, economics, and public relations. Duncan Patterson, CCIM, is president of Pat- terson-Woods & Associates LLC in Greenville, Del. Patterson is a past president of the CCIM Institute and of the Education Foundation of the CCIM Institute. He currently serves as a member of the foundation's Real Estate Gifting Realized program. Contact him at wppatterson @pattersonwoods.com. CCIM.com CCIM FOUNDATION LAUNCHES GIFTING PROGRAM With its best-of-class real estate heritage and its work to advance knowledge and professionalism in the commercial investment real estate industry, the not-for-profi t Education Foundation of the CCIM Institute is uniquely qualifi ed to simplify problematic real estate donations for any qualifi ed charity. With Real Estate Gifting Realized, fundraisers may be able to confi dently secure the donation of residential and commercial real estate-related assets with less risk and minimal involvement for every gifting option. CCIM Institute members are well equipped to serve as resources in the charitable real estate donation process. The CCIM education, skill set, and market knowledge give members unique insight into the process of establishing the fair market value for donation properties among other aspects of the transaction. Their services can be structured as standard commission- or fee-based projects and can provide an additional form of income for brokerages. For fundraisers involved with qualifying foundations, charities, and nonprofi ts, the willingness of property owners to provide charitable donations of real estate is an avenue for needed funding to help offset reduced donations in other categories. In fact, according to the Internal Revenue Service, the average real estate gift exceeds $700,000 per donation. The Education Foundation is prepared to facilitate real estate donations for other organizations. Donors may qualify for a tax benefi t based on the current fair market value of the property, not the original purchase price. This type of gift is compliant with federal tax code and accepted by the IRS. CCIMs who have clients that may benefi t from donating property or know of charitable organizations that can benefi t from real estate donations can work with the Real Estate Gifting Realized program to help clients realize the fi scal advantages of disposing of real estate through a charitable contribution. REFERRAL RESOURCE To refer an organization or learn more about Real Estate Gifting Realized, visit www.realestategifting.org, or contact Douglas Strickland, director of real estate gifting, at doug@ccimef.org. September | October | 2012 41