Gifts of Real Estate
Property Makes a Valuable Gift
Some alumni and friends are in a position to consider donating real estate to Carnegie Mellon. Even though the Taxpayer Relief Act of 1997 allows married couples to shield up to $500,000 (and up to $250,000 for an individual) in capital gains when they sell their home, there are still charitable and tax incentives to make this type of gift attractive.
If an individual has an unmortgaged, highly marketable property that he/she would like to donate to the university, there are several ways of completing this gift. (In order to make this complicated transaction easier, we are happy to provide our "Steps for Making a Real Estate Gift Guidelines" upon request.)
Outright Gift of Real Estate
If a donor would like to donate a home to Carnegie Mellon, the property would be deeded to the university and subsequently sold. The donor receives an immediate income tax deduction for the appraised value of the property. Please note: he/she must agree to pay the appraisal and carrying cost until the property is sold.
Retained Life Tenancy
In this case, ownership of the property is transferred to Carnegie Mellon, but the donor retains the right to use the property for his/her lifetime. Upon the death of the donor, the university will take full possession of the real estate and sell it. Please note: The donor will be asked to bear the cost of the appraisal and upkeep of the property (i.e. real estate tax and maintenance) while he/she is residing in the residence.
A Trust Funded with Real Estate
If a donor would like to deed property to a charitable remainder trust, with the understanding that the property will be sold and the proceeds used to fund the trust, income will be generated for the donor for his/her lifetime. As mentioned above, the donor would be asked to bear the costs of the appraisal and upkeep of the residence until the property was sold. At the death of the donor or beneficiary, the assets in the trust will pass to Carnegie Mellon.
Please contact Christine Tebes to learn more about gifts of real estate.