There are many options for donating your home, second home, commercial building, vacant land, farm, or other real estate to Claremont McKenna College. There may be a gift plan available that will help you achieve your charitable and financial goals.

A gift of real estate could be right for you if you have any of these goals:

  • You own real estate for which you no longer want to be responsible.
  • You are willing to donate your home if you can continue to live in it.
  • You own real estate that you are willing to sell to us for a bargain price.
  • You own real estate that you are willing to donate if you get income in return.
  • You want to save income taxes.
  • You want to make a generous gift to CMC.

How It Works:

Here are some common techniques for making a gift of real estate to CMC.

  • Give your real estate now.
  • Give your home now, but continue to live in it as long as you wish.
  • Give your real estate now and receive payments for life.
  • Give your real estate through your estate.
  • Give a portion of your real estate and keep the rest.
  • Sell your real estate to us for less than its appraised value.
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The common techniques for making gifts of real estate are each briefly described below. We would be happy to discuss with you which technique might be best for your particular situation and goals.

Transfer Your Real Estate to Us Outright

This is the simplest way for you to give Claremont McKenna College a piece of real estate. By giving us all rights to your real estate, you will maximize your support of CMC, and you will earn an immediate income tax charitable deduction equal to the full appraised value of your real estate.

Sell Your Real Estate to Us for Less Than Its Appraised Value

When you sell CMC your real estate in a “bargain sale” arrangement, you will enjoy several benefits. You will receive an immediate cash payment equal to the sale price and an immediate income tax charitable deduction for the difference between your sale price and the appraised value of your property. You will also avoid tax on some of your capital gain in the property.

Give Your Home to Us, but Continue to Live in it as Long as You Wish

When you give your home to CMC subject to a “retained life estate,” you can continue to live in your home for as long as you wish, for the rest of your life, or for the lives of you and your spouse. You will earn an immediate income tax charitable deduction for a portion of the value of your home. You also can make a retained life estate gift using a second home, farm, or any structure you use as a personal residence, such as a boat.

Give Your Real Estate Now and Receive Variable Payments for Life

Using a gift arrangement called a “flip unitrust,” you can give your real estate now and start receiving payments as soon as your real estate has been sold. Your payments will vary with the value of your flip unitrust. Payments equal to 5% or 6% of trust value are typical. You will also receive a substantial income tax charitable deduction in the year of your gift. In addition, there will be no immediate capital gains tax on the sale of your real estate.

Give Your Real Estate Now and Receive Secure Fixed Payments for Life

Using a gift arrangement called a “deferred gift annuity,” you can give your real estate now and receive payments of a fixed amount starting on the date you choose. The payment amount will depend on your age and how long after your donation payments will begin. Payments are backed by the general resources of Claremont McKenna College for life and may be partially tax-free. You also will receive a substantial income tax charitable deduction in the year of your gift and avoid or defer capital gains tax.

Give Us a Portion of Your Real Estate Holding

Rather than give us all of your real estate holding, you can give us an "undivided interest." For example, if you own 100 acres of farm land, you could give us 50 acres. You will receive an immediate income tax charitable deduction for the value of the portion you give. You will, of course, retain complete control of the portion of your real estate that you choose to keep.

Give Your Real Estate Through Your Estate

By making a gift of real estate through your estate, you will retain use of your property during your life. What's more, you can change your gift plan whenever you wish, should your circumstances or priorities change. Putting your gift of real estate into your estate plan now will help assure that your wishes will be carried out later. You may also save estate taxes.

Special Considerations When Giving Real Estate

Giving real estate to our organization requires some extra steps of which you should be aware. These steps include the following:

  • You will need to establish the value of your property by obtaining a qualified appraisal. To be valid for claiming your income tax charitable deduction, your appraisal must be conducted no more than 60 days before your donation and no later than the due date, including extensions, of your next tax return.
  • We will need to examine your property and conduct our own independent analysis of its value. For example, we will want to know if there are any debts, taxes, or liens owed on your property.
  • Once we accept your gift of real estate, we could become responsible for cleaning up any environmental problems your property may have. This sort of cleanup could be very expensive. Therefore, before we accept any gift of real estate, we routinely conduct a review to make sure the property has no environmental issues.

Example

Kyle Poole, 75, is a retired business executive who has accumulated $500,000 in the retirement plan that he set up through his company years ago. He takes minimum distributions from his plan in order to preserve as much tax-free growth inside the plan as he can. At this rate, he expects that his account may still be worth $500,000 when he dies.

Kyle has reached the time in his life when he has begun thinking about the legacies he wants to leave behind after he is gone. He decides to leave a bequest to Claremont McKenna College to create an endowed fund that will perpetuate generous support in his name. To accomplish his goals, he designates 40% of the final balance in his retirement account for Claremont McKenna College.

Benefits

  • There will be no income tax or estate tax on the 40% of Kyle's retirement plan assets that are transferred to CMC.
  • Assume the balance in Kyle's IRA when it ends is $500,000 and he donates 40% of that balance ($200,000) to CMC. If Kyle were to pass the same amount to his family, that distribution would be subject to ordinary income tax. His family would owe income tax of $74,000 (37% bracket) on the IRA assets, leaving only about $126,000 for their own use. If Kyle’s estate is subject to estate tax the tax savings would be even greater since his estate would be entitled to an estate tax charitable deduction of $200,000.  
  • Kyle has the immediate satisfaction of knowing that he has put a gift plan in place that will keep his name alive and support Claremont McKenna College long after he is gone.