Zero Tax Sale
Do you have a business, investment property, or real estate to sell? Many people pay hefty tax bills when they sell their businesses, investment properties, or real estate. Combining a charitable gift with the sale of an asset can avoid some or all the capital gains tax. Unfortunately, few consider charitable giving as a form of tax planning, and then end up paying additional taxes that could be used locally to make a difference in your community.
For example, consider a Zero Tax Sale as a method to eliminate capital gains taxes on sales of appreciated assets. A couple who owns a property with an estimated sale value of $3 million and a cost basis of $1 million can avoid paying $400,000 in capital gains tax by gifting 28.8% of the property to the Community Foundation before the sale. This strategy would give them a gift deduction of $284,892 and leave them with $2,136,691 in their pocket and $863,309 in a charitable donor-advised fund at the Community Foundation.
The Community Foundation of Northern Nevada helps people create donor-advised funds, charitable trusts, foundations, and scholarship funds. The Gorelick family, who contributed to the Community Foundation's Village on Sage Street housing project, found donating rental apartments that had appreciated in value was efficient. They plan to use their family's donor-advised fund to support community causes and nonprofits that are important to them, involving their sons in the grant decisions of their fund and encouraging the boys to contribute their own time and energy. Allison Gorelick was pleased with the process and said, "we were impressed by how easy it was to donate real estate."
When considering setting up their donor-advised fund to support affordable housing solutions locally, Jeff and Allison Gorelick said, "Our boys are focused on other young people, without family help, who may find it tough to save enough money while working minimum wage to meet a security deposit and first month's rent. Our son, Lucas, proposed that families like ours sponsor a new tenant and help somebody move into a stable housing situation. Meaningfully, he used his own savings to be among the first sponsors."
Zero Tax Sales are just one of the many solutions the Community Foundation offers to facilitate philanthropic giving in our community. If you are interested in learning more about Zero Tax Sales or other Charitable Gift Planning methods, please contact your professional advisor or reach out to our team directly to get started.
Contact Shari Netzel, Vice President of Donor Relations, at snetzel@nevadafund.org or 775-333-5499.