You can make gifts of real estate to IICS.
The IICS Foundation partners with Servant Christian Community Foundation (SCCF), which enables it to receive full or partial gifts of appreciated real estate. By giving such property to IICS in kind, rather than selling it first, you can make a larger charitable gift and realize greater tax benefits at the same time. By giving through SCCF, you will also be relieved of the administrative burden of selling the real estate because it will handle all aspects of the sale and credit the net proceeds to the IICS Foundation.

What do you need to do?
If you decide to make a gift of real estate to IICS, you will need to submit to SCCF certain documents pertaining to your interest in the property you wish to donate. This will enable SCCF to determine whether the property is transferable and what the best method of transfer would be. These documents include:

• Copy of current deed
• Boundary survey
• Last tax assessment notice/tax bill paid
• Current insurance coverage
• Copy of title insurance policy
• Current appraisal
• Any agreements associated with property
• Phase I environmental inspection report

  Provided by SCCF:

• Real Estate questionnaire
• Indemnification agreement
• Environmental questionnaire

What happens next?

1. SCCF will review the gift and submit a gift offer letter to you as the owner. If the decision is made to proceed, a transfer document will be drawn up, whether by SCCF or your legal counsel.

2. The gift date will be established when the transfer document is executed. Additional items, such as an appraisal and IRS Form 8283 will need to be obtained after the gift has been completed.

3. SCCF will next either sell the property or continue the ongoing management of it, whichever is appropriate.

4. Upon sale of the asset, the net proceeds will be credited to the IICS Foundation, less associated costs.

How can you know if your property will make an appropriate gift for tax purposes?
Your gift will qualify for the tax benefits if:

• You have held it for more than one year
• It has appreciated in value
• It is transferable and not restricted by any other contract or obligation

What else do I need to know?
SCCF requires that a portion of the gift be retained to cover its costs associated with acquiring, managing and liquidating the property. When the real estate is sold, SCCF will retain a portion of the sale proceeds to cover expenses and support the ministry work of SCCF. (For more information, see their website at www.servantchristian.com.) At sale, SCCF will place approximately 92 to 98% of the net proceeds into the IICS Foundation account. It is best to donate the real estate before signing any letter of intent, binding contract or other formal agreement with a potential buyer.

Husband and Wife bought some real estate 30 years ago for $5,000. Over the years, the value of that real estate has increased and it now has a fair market value of $250,000. They would like to make a gift to IICS.

An interested buyer has approached them offering to buy the property. Husband and Wife have a choice:

1. They could sell the real estate directly to the buyer, pay the capital gains taxes and give the net proceeds to IICS, or better,

2. They can give the real estate directly to IICS and let IICS sell the property to the buyer.

If Husband and Wife are in a 35 percent federal tax bracket and a 6 percent state tax bracket, they will realize some major advantages by choosing the second option:

Capital gains tax avoided. Husband and wife will avoid capital gains tax, thereby saving $51,450 (21 percent of $245,000) in federal and state income taxes.

Charitable income tax deduction. Husband and Wife will get an immediate charitable income tax deduction in the amount of $250,000, (the fair market value of the real estate), subject to a 30 percent limit of their adjusted gross income. If their deduction exceeds this limit, they can carry over any unused portion of their $250,000 deduction for the next five years.

The gift is maximized. Husband and Wife are able to give $250,000 to IICS rather than the $198,550 they would have had if they had sold the real estate first and donated the proceeds after paying taxes. Instead, they will avoid a $51,450 tax bill and they will be able to give this amount to their favorite charity!

Lower out-of-pocket costs. The out-of-pocket cost of the $250,000 gift for Husband and Wife is $147,500 - far less than the $168,595 they would have paid if they had sold the real estate and then given away the net proceeds.