Donating real estate to a charity

[happyscooter]

As some of you know, my mom passed away last year. We are on our second round of listing the house with a Realtor. The first time it was listed for 180 days. We are now in our second month of a 120 day listing. After this time runs through, I will be ready to offer the property to a charity. In our county, Habitat is accepting property to renovate instead of building new. I think one sibling would be on board, the other I don't think so. However, we are running out of funds (mom's) to keep the house going. Power, heat, repairs. Homeowners insurance has been canceled, a year has passed. I have checked the IRS website but I'm not sure how to go about it. Also, I want to tell the sibling that I don't feel I should sign over my part to them after all I have done. (Repairs, grass cutting, cleaning out the house, trips to Goodwill, etc...) Any ideas on how to proceed and what would need to be done to make a non-monetary donation?

[taxref]

"Also, I want to tell the sibling that I don't feel I should sign over my part to them after all I have done."

I was following your message perfectly until that sentence, and I would suggest first clarifying it prior to answers being made. I am unsure if you mean you don't want to give your share of the property to the charity, whether you want to have any possible deduction for yourself only, or any other possible meaning. If you could give more details as to that point, it would be very helpful.

[mwcpa]

who is the owner of the property?
can you obtain a qualified appraisal?

[happyscooter]

I meant that I don't feel that I should sign over my part to the other heirs. I have done alot of work over the past year and I feel that I should get something. I will be the one making the suggestion to donate the property. Probate is closed, heirs own the property equally. I can get an appraisal for around $400, or maybe use the one that the realtor used. This isn't some piece of property worth BIG $$$. This is just a house that needs some work (think 70s).

[mwcpa]

"heirs own the property equally"

then all heirs need to agree to transfer the property....

any tax benefit will be limited to the "value" of the land as appraised. A formal appraisal is REQUIRED (the cost of the appraisal is NOT a tax deduction). the deduction, if given to an organization, like the one you noted, is limited to 50% of AGI in the current year, any unused amount is carried forward (subject to the same limits and others).

See...
www.irs.gov/publications/p561/index.html (Publication 561 (4/2007), Determining the Value of Donated Property)
www.irs.gov/publications/p526/index.html (Publication 526 (2010), Charitable Contributions)
and
www.irs.gov/pub/irs-pdf/f8283.pdf (Form 8283)
all found at IRS.gov

[Deleted]

Sept 30, 2011 7:57:09 GMT -5 happyscooter said:

I meant that I don't feel that I should sign over my part to the other heirs. I have done alot of work over the past year and I feel that I should get something. I will be the one making the suggestion to donate the property. Probate is closed, heirs own the property equally. I can get an appraisal for around $400, or maybe use the one that the realtor used. This isn't some piece of property worth BIG $$$. This is just a house that needs some work (think 70s).

If you are the executor of the estate, you can be compensated by the estate for your time. That money comes out of the estate and then the rest is split per the terms of the will.

[rangerj]

Given today's market the sale of the property may result in a loss for tax purposes. The basis is the fair market value as of the date of death and that value may have dropped since that time. The deductible value is the fair market value as of the date of the contribution (title transfer to the charity). A "qualified appraisal" (by a qualified appraiser) is REQUIRED for non-cash donations over a specified amount ($5000 IIR).

[happyscooter]

Archie, I am not the executor. But at any rate, probate is closed. So we are all equal. Executor should have said 'personal feelings aside, we have to make decisions based on facts and be practical.' Maybe if that sib had done that, we wouldn't be here today.
Sib executor didn't take any $$ for his time.

[activeonlooker]

You won't be able to use the realtors appraisal for the donation. The code is quite specific regarding the verbiage to be included in the appraisal. Also, according to the code, the appraisal must state that its purpose is for a charitable donation. I had a client donate a million dollar home to a church and had to have the appraiser reword his appraisal twice so that it was in compliance with the code.

[Deleted]

I do not understand, if probate is closed, why you do not price the property to sell at whatever price is necessary to move it?. A charitable deduction would not be worth anything more than the appraised value (your portion), so what is the incentive to donate? Based on comment above that one sib might not want to donate, how would you even move forward? All owners would need to sign off on the transfer.

The IRS provides info regarding the need for a qualified appraisal (see publication 561): www.irs.gov/charities/charitable/article/0,,id=123202,00.html

What properties are selling in the market this home is in? What price would you have to be at to sell it?

ETA - What is the current listing price & what has the Realtor said about the likelihood of selling? Is the problem sib forcing listing at a higher price than the home can realistically sell at?