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Now, let's discuss considerations regarding
real estate to determine when that contribution will be deductible.
Real estate is a bit more complex than cash or securities.
The transfer ownership is not as simple as writing a check or endorsing a certificate.
The owner of real estate uses
a legal document called a deed to transfer their title to the charity.
The deed details who has ownership or title to the property.
Deeds must be recorded in the courthouse or
a assessor's office to make them fully binding in most states,
but a failure to file them does not change the transfer of title.
It just means that the deed is not perfected.
An imperfect deed does not mean that there is a problem with the title,
it's just a problem with the way the paperwork surrounding the deed was handled.
Understanding the process of transferring title of a property will provide
you with an understanding that will help negotiate a gift of real estate,
manage the donor's expectations,
and create a positive experience for your donor.
The basic steps to transferring title include, first,
obtain a certified copy of the existing deed from the county clerk or recorder's office,
and review the following information contained therein: names of owners,
legal description, address and tax assessment number.
They should all be accurate before any changes are made to the deed.
Second, get a fill in the blank deed form from an online source,
a local office supply store,
or the county clerk's office.
They are often state specific,
which means that they use language and guidelines that are compliant with statutes.
Third, in the document,
the person transferring interest in the property is the grantor.
The person receiving the interest is a grantee.
Prepare the form by filling in the appropriate information,
but don't sign it yet.
Finally, go to the county recorder's office with the unsigned document,
and the identification documents of the parties involved in the change or transfer.
The county clerk can act as a notary and record the document at the same time.
They can even provide a witness to the signing.
However, a notary can be contracted for this purpose,
and the executed deed can be recorded later.
In most circumstances, you engage with a title company to execute the above steps,
including completing a title search to make sure there aren't any issues with the title,
and securing title insurance.
It's important to know the basic steps needed to transfer title,
but use an expert like a title company to make
sure your charity is protected from any title issues.
For charitable tax deduction purposes,
the date the charity receives a properly executed deed is the delivery date,
but if the deed must be recorded to effectuate title under local law,
the delivery date is a date of recording.
This date is important.
It determines the tax year in which the gift deductible,
the value of the gift for assets that fluctuate in value,
and in close cases,
whether a gift is a long term or short term property.
In my many years of experience,
I have come across donors who want to contribute assets that might not
be something you would think of as a common asset.
These have included artwork, antiques, and cars.
You should be prepared to determine if such a contribution would be deductible.
Now, let's discuss considerations regarding
these other less common assets to determine when that contribution would be deductible.
Even though these assets are less common,
they're still important, especially artwork.
Many donors may have very valuable art that would make an excellent gift to your charity.
This is especially of significance if you are
a museum or have a museum associated with your charity.
These works of art can easily be valued in the six figures and even seven figures.
Most of these less common assets would transfer the charity using a deed of gift.
In the case of a car,
the donor would transfer the title of the vehicle to the charity.
When the deed of gift or title has been fully executed,
then the gift has been completed.
Date the charity receives a properly executed deed or title is the delivery date.
This date is used to determine the tax year for the charitable deduction,
and the value of the gift.
There is a resource that will guide you whenever you need to
determine whether and when a contribution will be deductible.
I'm going to present it briefly,
but it is presented in more detail in a document among your resources.
I recommend you print that,
and use it as a workplace reference tool until it is ingrained in you.
The Internal Revenue Service determines if and when a charitable deduction is deductible.
The tax code is the ultimate resource,
but the IRS puts out publications that provide
users with a guide to understanding on specific topics.
IRS Publication 526 is that resource for charitable contributions.
It highlights contributions you can deduct,
contributions you can't deduct,
when to deduct, and limitations on deductions.
When in doubt, I would start with this reference as a place to find your answer.
In addition to great content,
you will also find cross-references to
other publications that will further your research towards a conclusion.
Let's recap what we've covered.
After this lesson, you should be able to
determine when a planned giving contribution is deductible,
explain what makes a contribution tax deductible, list, discuss,
and distinguish between gifts made by check, credit card,
electronic transfers, securities, real estate,
and less common assets.
This concludes the video lessons for this module.
Please remember to check the resources,
activities, and discussions to enhance your learning.
I look forward to reconnecting in the next module on this course on planned giving.
That will be module two,
where we will get an overview of planned giving options.
Brian CaseyAssistant Vice Chancellor for Planned Giving
