Transforming Realty to Gift Reality
Discover All of Your Options
Start Paying It Forward
Learn more about the many ways to use real estate to support IES Abroad in the FREE guide 7 Ways to Donate Real Estate.View My Guide
Want to make a big gift to IES Abroad without touching your bank account? Consider making a gift through your real estate. Such a generous gift helps us continue our work for years to come. And a gift of real estate also helps you. When you give us appreciated property you have held longer than one year, you qualify for a federal income tax charitable deduction. This eliminates capital gains tax. And you no longer have to deal with that property's maintenance costs, property taxes or insurance. Note that a gift of real estate must be approved for acceptance by IES Abroad.
Another benefit: You don't have to hassle with selling the real estate. You can deed the property directly to IES Abroad or ask your attorney to add a few sentences in your will or trust agreement.
Ways to Give Real Estate
You can give real estate to IES Abroad in the following ways:
When you make a gift today of real estate you have owned longer than one year, you qualify for a federal income tax charitable deduction equal to the property's full fair market value. This deduction lets you reduce the cost of making the gift and frees cash that otherwise would have been used to pay taxes. By donating the property to us, you also eliminate capital gains tax on its appreciation.
A gift of real estate through your will or living trust allows you the flexibility to change your mind and the potential to support our work with a larger gift than you could during your lifetime. In as little as one sentence or two, you can ensure that your support for IES Abroad continues after your lifetime.
Perhaps you like the tax advantages a gift of real estate to our organization would offer, but you want to continue living in your personal residence for your lifetime. You can transfer your personal residence or farm to IES Abroad but keep the right to occupy (or rent out) the home for the rest of your life. You continue to pay real estate taxes, maintenance fees and insurance on the property. Even though IES Abroad would not actually take possession of the residence until after your lifetime, since your gift cannot be revoked, you qualify for a federal income tax charitable deduction for a portion of your home's value.
You can contribute any type of appreciated real estate you've owned for more than one year, provided it's unmortgaged, in exchange for an income stream for life or a term of up to 20 years. The donated property may be a residence (a personal residence must be vacant upon contribution), undeveloped land, a farm or commercial property. Real estate works well with only certain variations of charitable remainder trusts. Your estate planning attorney, who will draft your trust, can give you more details.
This gift can be a wonderful way for you to benefit IES Abroad and simultaneously transfer appreciated real estate to your family tax-free. You should consider funding the charitable lead trust with real estate that is income-producing and expected to increase in value over the term of the trust.
A gift of real estate may be a perfect way to honor your loved one in perpetuity. When you make an endowed gift of real estate, your contribution is invested with and becomes part of our endowment. An annual distribution is made for the purpose you designate. Because the principal remains intact, the fund will generate support in perpetuity.
Examples of How It Works
Outright Gift of Real Estate
Janet purchased a rental property years ago and has watched it grow steadily in value. Still active in her career and traveling frequently, she's beginning to find management of the property more and more of a hassle. At this stage of her life, Janet has decided to move to a 55+ condominium development, where all exterior maintenance is provided and she doesn't have to worry about security issues. Janet sees this as an opportunity to give her rental property to a charity that's important to her while realizing valuable tax benefits.
Janet avoids capital gains tax on the appreciation and qualifies for a federal income tax charitable deduction of $250,000, which is the property's fair market value today. She is able to claim 30 percent of her $200,000 adjusted gross income, or $60,000, in the year of the gift. In the five years following, she can continue to use up the remaining $190,000 deduction. Janet is happy in her new condo and loves knowing that the gift of her property will make a big difference supporting our mission.
Gift of Real Estate with Retained Life Interest
Tom bought the property of his dreams, a second home near the ocean, in 1995 for $200,000. The property is now worth $400,000. Wanting to make a difference at IES Abroad, Tom (now 65) learns that he can make a charitable gift of his vacation home and continue to use it for the rest of his life. By deeding his vacation home to IES Abroad now and retaining a life estate, Tom will obtain a sizable charitable income tax deduction this year—based on his age (and the age of any other person to whom he gives a life interest) and the current value of his property. In addition, he retains the right to use his vacation home at any time and is responsible for maintenance, insurance and property taxes.
Based on the market value of the property (the house: $300,000, and the land: $100,000) and Tom’s life expectancy, his certified public accountant determines his income tax deduction to be in excess of $214,750.* Tom continues to enjoy his ocean front property and knows that the value of his vacation home will one day provide opportunities for students to have the life-changing experience of study abroad, as he did.
*Based on a 2.4 percent charitable midterm federal rate. Deductions vary based on income earned.
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Not Sure How to Begin Planning?
- Contact IES Abroad Advancement at 312-944-1750 or Toll Free 800-995-2300 or alumni@IESabroad.org to discuss the possibility of giving real estate to IES Abroad.
- Seek the advice of your financial or legal advisor to make sure this gift fits your goals.
- If you include IES Abroad in your plans, please use our legal name and federal tax ID.
Legal Name: Institute for the International Education of Students dba IES Abroad
Address: Chicago, IL
Federal Tax ID Number: #36-2251912
Information contained herein was accurate at the time of posting. The information on this website is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor. Figures cited in any examples are for illustrative purposes only. References to tax rates include federal taxes only and are subject to change. State law may further impact your individual results. Annuities are subject to regulation by the State of California. Payments under such agreements, however, are not protected or otherwise guaranteed by any government agency or the California Life and Health Insurance Guarantee Association. A charitable gift annuity is not regulated by the Oklahoma Insurance Department and is not protected by a guaranty association affiliated with the Oklahoma Insurance Department. Charitable gift annuities are not regulated by and are not under the jurisdiction of the South Dakota Division of Insurance.