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Outright Gift of Real Estate

Transforming Realty to Gift Reality

Want to make a big gift to Murray State University without touching your bank account? Consider giving us 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.

Another benefit: You don't have to hassle with selling the real estate. You can deed the property directly to Murray State University Foundation 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 Murray State University Foundation in the following ways:

An outright gift+

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.

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A gift in your will or living trust+

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 Murray State University Foundation continues after your lifetime.

A retained life estate+

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 Murray State University Foundation 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 Murray State University Foundation 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.

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A deferred charitable gift annuity+

Are you tired of the hassles of maintaining your property such as paying taxes, utilities and repair bills? Consider donating the property to Murray State University Foundation in exchange for reliable payments for life for you (and someone else, if you choose). When you arrange a charitable gift annuity, you receive a federal income tax charitable deduction in the year you set up the gift annuity when you itemize on your taxes. If you use appreciated real estate to make a gift, you can usually eliminate capital gains tax on a portion of the gift and spread the rest of the gain over your life expectancy. A gift of unmortgaged property to fund a deferred gift annuity is preferable and generates the greatest tax benefit.

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A bargain sale+

Want to sell us your property for less than the fair market value? A "bargain sale" may be the answer. When you make a bargain sale, you sell your property to our organization for less than what it's worth. The difference between the actual value and the sale price is considered a gift to us. A bargain sale can be an effective way to dispose of property that has increased in value, and it is the only gift vehicle that can give you a lump sum of cash and a charitable deduction (when you itemize) at the same time.

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A charitable remainder unitrust+

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.

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A charitable lead trust+

This gift can be a wonderful way for you to benefit Murray State University Foundation 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 memorial or endowed gift+

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.

A donor advised fund+

When you transfer real estate to your donor advised fund, you avoid capital gains taxes and qualify for a federal income tax deduction based on the fair market value of the property when you itemize on your taxes.

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Learn more about the many ways to use real estate to support Murray State University in the FREE guide 7 Ways to Donate Real Estate.

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An Example of How It Works

Woman smiling 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.

Next Steps

  1. Contact Dr. David Durr, CFA, CFP® at 270-809-6912 or ddurr@murraystate.edu to discuss the possibility of giving real estate to Murray State University Foundation.
  2. Seek the advice of your financial or legal advisor to make sure this gift fits your goals.
  3. If you include Murray State University Foundation in your plans, please use our legal name and federal tax ID.

Legal Name: Murray State University Foundation, Inc.
Address: Murray, KY
Federal Tax ID Number: 61-6053844

A charitable bequest is one or two sentences in your will or living trust that leave to Murray State University a specific item, an amount of money, a gift contingent upon certain events or a percentage of your estate.

an individual or organization designated to receive benefits or funds under a will or other contract, such as an insurance policy, trust or retirement plan

"I give to Murray State University, a nonprofit corporation currently located at Murray, KY, or its successor thereto, ______________ [written amount or percentage of the estate or description of property] for its unrestricted use and purpose."

able to be changed or cancelled

A revocable living trust is set up during your lifetime and can be revoked at any time before death. They allow assets held in the trust to pass directly to beneficiaries without probate court proceedings and can also reduce federal estate taxes.

cannot be changed or cancelled

tax on gifts generally paid by the person making the gift rather than the recipient

the original value of an asset, such as stock, before its appreciation or depreciation

the growth in value of an asset like stock or real estate since the original purchase

the price a willing buyer and willing seller can agree on

The person receiving the gift annuity payments.

the part of an estate left after debts, taxes and specific bequests have been paid

a written and properly witnessed legal change to a will

the person named in a will to manage the estate, collect the property, pay any debt, and distribute property according to the will

A donor advised fund is an account that you set up but which is managed by a nonprofit organization. You contribute to the account, which grows tax-free. You can recommend how much (and how often) you want to distribute money from that fund to Murray State University Foundation or other charities. You cannot direct the gifts.

An endowed gift can create a new endowment or add to an existing endowment. The principal of the endowment is invested and a portion of the principal’s earnings are used each year to support our mission.

Tax on the growth in value of an asset—such as real estate or stock—since its original purchase.

Securities, real estate or any other property having a fair market value greater than its original purchase price.

Real estate can be a personal residence, vacation home, timeshare property, farm, commercial property or undeveloped land.

A charitable remainder trust provides you or other named individuals income each year for life or a period not exceeding 20 years from assets you give to the trust you create.

You give assets to a trust that pays our organization set payments for a number of years, which you choose. The longer the length of time, the better the potential tax savings to you. When the term is up, the remaining trust assets go to you, your family or other beneficiaries you select. This is an excellent way to transfer property to family members at a minimal cost.

You fund this type of trust with cash or appreciated assets—and may qualify for a federal income tax charitable deduction when you itemize. You can also make additional gifts; each one also qualifies for a tax deduction. The trust pays you, each year, a variable amount based on a fixed percentage of the fair market value of the trust assets. When the trust terminates, the remaining principal goes to Murray State University Foundation as a lump sum.

You fund this trust with cash or appreciated assets—and may qualify for a federal income tax charitable deduction when you itemize. Each year the trust pays you or another named individual the same dollar amount you choose at the start. When the trust terminates, the remaining principal goes to Murray State University Foundation as a lump sum.

A beneficiary designation clearly identifies how specific assets will be distributed after your death.

A charitable gift annuity involves a simple contract between you and Murray State University Foundation where you agree to make a gift to Murray State University Foundation and we, in return, agree to pay you (and someone else, if you choose) a fixed amount each year for the rest of your life.
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