GIVING THE GIFT OF REAL ESTATE
Make Real Estate Donations Work – For Everyone
By Herbert L. Krumsick, SIOR, CCIM, CRE, FRICS
Here’s a quiz for all you SIOR readers (relax–no grades; just some fun):
• What do Berkshire Hathaway, Chrysler, United Artists, RJR and Florida Power
& Light have in common?
in Denver, a closed electrical plant in Wiscasset, Maine, and acres of underdeveloped
land in Lexington, Kentucky?
These aren’t trick questions, and here’s a hint: the answer includes the words “real estate.”
To the first question, the answer is that all of those companies, and dozens more like them, solved a challenging problem in their real estate
portfolios with either a full donation, or a donation structured as a bargain sale, where the property is sold to a charity for less than the appraised
fair market value. In either case, the seller/donor can claim a tax deduction–for either the full amount of the appraised value, or in the case of
a bargain sale, the difference between the fair market value and the amount paid. In all these cases, the charity was the National Development
Council (NDC),a 45-year old non-profit economic development organization that helps communities throughout the country..
The answer to the second question: those are a sampling of the different kinds of properties that were the subject of those transactions, all
of them either donated or sold in a bargain sale (again, to NDC).
Why would a business consider this strategy for disposing of surplus real estate? It is not unusual that a corporation finds itself with a proverbial “white elephant,” or property that has been on its books for a long time. When it’s time to dispose of the property, it’s also not unusual that