Gifts of Real Estate

Make an Outright Gift

If you give real estate outright to the University, you will be eligible for an income tax charitable deduction for the full fair market value of the real estate as long as you have owned it for more than one year. You will avoid the capital gains tax you would have had to pay if you had sold the property.

Example

James wants to make a gift to support UVA, but many of his assets are illiquid. The undeveloped land he bought several years ago for $10,000 was recently appraised for $100,000. If James sells the land himself, he will owe capital gains tax (as much as $13,500 or $18,000, depending on his tax situation) and pay the expenses of sale. If he gives the land to UVA, he will not recognize any capital gain, will be eligible to claim an income tax deduction for the land’s full $100,000 fair market value, and will have removed the property's value from his estate.

Make a Gift Through Your Will or Living Trust

Designating the University as a beneficiary of a real estate gift in your will could result in estate tax benefits. We encourage you to let us know about your gift, which will help the University fully understand your intentions and ensure that there is a plan in place for implementing them. Documenting your bequest also qualifies you for membership in the Cornerstone Society.

Fund a Flip Charitable Remainder Unitrust

Real estate can be used to fund a special kind of trust called a Flip Charitable Remainder Unitrust (Flip CRUT). Once funded with your property, the trust will make annual payments to you and/or other beneficiaries you name for life or a term of up to 20 years you define. Until the property is sold, the payments will comprise only net income, but beginning on January 1 of the year following the trust’s sale of the property, your payments will be based on a set percentage, typically between 5% and 7%, of the total trust value each year. In addition, you will be eligible for an immediate income tax deduction based on the charitable portion of your gift when you create your Flip CRUT. You will also have removed the assets from your taxable estate. At the end of the trust term, the remaining assets will pass to UVA to be used for the purposes you designate.

Example

Caroline owns a parcel of land, purchased for $250,000, which recently appraised for $500,000. At 60, Caroline is ready to retire and wants to supplement her income. If she sells the property, she will owe capital gains tax (as much as $37,500 or $50,000, depending on her tax situation) and will pay realtor fees and other expenses. Instead, Caroline transfers her land to a 6% Flip CRUT. She is eligible to claim an immediate income tax charitable deduction of just over $159,000 and will receive quarterly trust payments for life, starting with net income (if any) before the land is sold. When the land is sold, Caroline will begin receiving an annual 6% unitrust payment based on the annual trust value each year. At her death, the remaining assets in the trust will be distributed to UVA for the purposes she has designated.