A Gift of Real Estate
- Real estate held more than 12 months can be contributed outright to The Prout School, entitling the donor to an income tax deduction based on the current, appraised fair market value. The donor can claim a deduction up to 30 percent of his or her adjusted gross income in the year of the gift. Any amount exceeding the 30 percent ceiling can be carried forward and deducted for up to five more years. In addition, the donor avoids a potential capital gains tax on the property. Note: Real estate gifts are expedited when there is no mortgage on the property. A donor can also transfer real estate to a charitable trust while retaining the income from the trust. Through such a plan, a donor can convert a non-income-producing asset to new income, receive an income tax deduction for part of the gift, avoid capital gains tax when the property is sold by the trust and make a significant gift to The Prout School. Prospective donors interested in making a gift of Real Estate may contact Mrs. Rhonda Skinkle in The Office of Institutional Advancement at (401) 789-9262 ext. 537 for further details.
An Example of a Gift of Real Estate:
- A donor invested $20,000 in a piece of land many years ago. It is now worth $100,000. If he contributes it to the Prout School, he is entitled to a deduction of $100,000 on his income tax return. Also, he will not owe the capital gains tax which would be due had he sold the property (a savings of $16,000.)