Zero Tax Sale

Donors and the Community Foundation find all sorts of ways to work together to increase philanthropy and build charitable impact in our region. Charitable goals and passion for a cause motivate people to look into their assets to find something they can turn into charitable dollars. The Community Foundation works hard to make the most of their gifts. One example of a type of gift that has helped our donors is called the “zero tax sale.”  In this scenario, a donor has an income property they wish to sell.  Typically it has a low basis so it will be subject to capital gains tax.  We do a calculation based on the donor’s personal tax situation and on the estimated sale value and basis of the property.  That calculation tells us how much of the property the donor needs to “gift” to the Community Foundation to exactly offset the taxes they would pay.  The donor gifts that percentage of the property and the Community Foundation lists it for sale.  When the property sells, the contributed portion goes into a charitable fund for the donor’s use, and the remaining portion goes into their pocket. We invest our charitable assets, and even with our economic turmoil, our 5-year investment return has averaged slightly better than 5%. The donor not only has the gift sale proceeds in a charitable fund, but that fund is growing; so the donor even has more to give away.  I sometimes describe this arrangement as, “Costing the donor 60 cents to have a dollar to give away.”  It is a generalization, but the donors who have gifted through this mechanism are happy with the results.  We could even get fancier and have the proceeds go into a charitable income instrument that pays income to the donor or to family members they designate. Trust the Community Foundation’s expertise at accepting appreciated property and unusual gifts to benefit our region.  Over the years, we’ve received multiple properties in California for transplanted residents, commercial property and land in five states. The Community Foundation owns an operating company and long-term lease on a grocery store in Memphis. Local donors have contributed a rare Testore violin, lumber property in Oregon, and fractional interests in dozens of properties in Washoe, Churchill, Lyon, and Storey Counties.  Each of these “unusual” gifts is received with gratitude for the donor’s generous spirit and the gift's concrete charitable benefit in our region.  We are honored to be a trusted partner with donors and their professional advisors. Everybody’s situation is different. The variety of charitable gift plans that benefit donors and their community is exciting, and one might be just the ticket to help you reach your charitable goals. Are you curious about how you can make a charitable gift with little or no tax, or that can generate income, or come from your IRA distribution?  Give me a call, and we can run the numbers. Chris Askin, President and CEO