Making a Gift of Real Estate

If you own marketable real property, you may wish to consider contributing it to the New York Philharmonic and knowing that you have made a major gift to the Orchestra. Giving real estate is often an intelligent alternative to selling property.

A gift of real estate can help the Philharmonic and enhance your financial condition by providing retirement income and tax savings. You can avoid the capital gains tax on appreciated property, and you can claim an income tax deduction for your gift. A qualified appraisal of the property by an independent appraiser is required to determine the property's value.

Making a gift of real estate requires the involvement of your own trusted legal and financial advisors as well as acceptance by the New York Philharmonic. You will need to consult these advisors on how a charitable gift of real estate will affect your own unique circumstances.

Ways to Contribute Real Estate

A. You May Make an Outright Gift
The most common way to convey real estate to the Philharmonic is through an outright gift. You deliver a properly executed deed to the property, in a form acceptable to the Philharmonic. You will qualify for an income tax deduction (subject to certain limitations) equal to the property's full fair market value. If the value of the property has appreciated, you will owe no tax on the long-term capital gain.

B. You May Make a Gift of a Partial Interest
A partial interest is created if you retain a right or an incident of ownership (an element of control) with respect to a property transferred to the Philharmonic. Generally, a charitable deduction is not allowed for a gift of a partial interest.

• A Retained Life Estate
  An important exception to the partial interest gift is a retained life estate. You can contribute your personal residence or farm and retain the right to live in it, continuing to be responsible for taxes, insurance and expenses of maintaining the residence during your lifetime. You will receive an income tax deduction for the remainder value of the property, avoid potential capital gains tax, and free up income through the use of the charitable deduction.
• An Undivided Interest
  Another option in making a gift of a partial interest permits you to give the Philharmonic an "undivided interest" in real estate you own. The Philharmonic would receive the exclusive right to use, lease or receive income from the property in an amount proportional to its undivided interest in the property. You would retain rights to the property, proportional to your share. You would be entitled to an income tax deduction based on the value of the undivided interest given. This method of giving real estate is very popular for vacation homes and commercial real estate.

C. You May Fund a Charitable Trust
You may transfer appreciated property to a charitable trust and give the trustee the authority to sell the property. The trust will pay an income to you, or someone you name, for life or a term of years, after which trust assets pass to the Philharmonic. You would receive an immediate income tax deduction (based on the projected value of the remainder interest) that will pass to the Philharmonic, which must be at least 10% of the assets placed in the trust.

Important Considerations: Any potential gift of real estate to the Philharmonic should be discussed with the Office of Planned Gifts. Philharmonic officials need to be involved early in the decision-making process to determine if the Philharmonic will be able to accept the property as a gift. It is helpful to have a copy of the property deed and a recent appraisal.

Contact:
Marilyn J. Liebowitz
Director of Major and Planned Gifts
New York Philharmonic
10 Lincoln Center Plaza
New York, NY 10023
Tel: (212) 875-5696
Fax: (212) 875-5716
E-mail: liebowitzm@nyphil.org