A Quick Guide for Professional Advisors 

Real estate is often the client’s largest asset, yet it represents only a small share of charitable giving. As wealth transfers to younger generations, and more wealth is held in property rather than cash, donating real estate is becoming an important philanthropic planning tool. 

Below are key points advisors should keep in mind when discussing charitable gifts of real estate with clients. 

Why Real Estate Gifts Matter 

  • Many clients are asset-rich but cash-light 
  • Appreciated property can be more tax-efficient to give than selling 
  • Vacation homes or rental properties may feel underused or burdensome 
  • Donating real estate can align financial planning with charitable goals 

 Key Planning Considerations

1. Potential Tax Benefits
  • Real estate held more than one year may qualify for a charitable deduction at fair market value 
  • Capital gains tax may be avoided when property is donated to a public charity 

🔗 Internal Revenue Service – Charitable contribution deductions

2. Funding a Donor Advised Fund (DAF)
  • Clients can donate real estate to a DAF at a community foundation 
  • When the property is sold: 
    • No capital gains tax is triggered 
    • Proceeds flow into the charitable fund 
  • Clients can support favorite charities over time 

🔗 Fidelity Charitable – Real estate and complex assets

3. Engage the NoCo Foundation Early

Before initiating a gift, connect with the NoCo Foundation to: 

  • Evaluate gift feasibility 
  • Identify potential issues 
  • Determine the best charitable fund structure 

🔗 Council on Foundations – Community Foundations

4. Property-Specific Issues to Review

Not all properties are immediately suitable. Key questions include: 

  • Is there debt or a mortgage on the property? 
  • Has the property been depreciated? 
  • Could unrelated business income tax (UBIT) apply? 
  • Is environmental due diligence required? 

🔗 IRS overview of UBIT

5. Documentation Is Essential

Clients must: 

  • Obtain a qualified appraisal 
  • Report the gift on IRS Form 8283 
  • Transfer title using proper legal documents (e.g., deed) 

🔗 IRS Form 8283 instructions

6. Avoid Pre-Arranged Sales
  • The property must not have a buyer lined up prior to donating 
  • Pre-arranged sales can jeopardize the deduction under IRS rules 

🔗 IRS guidance on assignment of income

Bottom Line for Advisors 

Charitable gifts of real estate may seem complex, but with proper planning they can: 

  • Unlock significant tax advantages 
  • Convert illiquid assets into lasting charitable impact 
  • Strengthen advisor-client relationships through values-based planning 

The NoCo Foundation is a trusted partner in helping advisors and clients navigate these gifts successfully. 

Schedule a quick call to explore real estate strategies for your client meetings.