Avoiding capital gains tax through a real property donation is a highly strategic financial maneuver. By transferring a long-term appreciated asset directly to a charity, you never realize the capital gain, meaning you owe $0 in capital gains taxes. Concurrently, you secure a federal income tax deduction based on the property’s full current market value, up to 30% of your Adjusted Gross Income (AGI), with a five-year carryover for any excess.
💡 Depreciation Recapture
For commercial real estate investors, selling a property often triggers severe depreciation recapture taxes, forcing you to pay ordinary income tax rates on previous deductions. A charitable transfer completely shields you from this recapture, preserving your wealth and closing the liability loop. Always consult your CPA to see how this protects your specific portfolio.