Long-term capital gain real property donations unlock a dual-benefit tax strategy. Individual donors can typically deduct the full Fair Market Value (FMV) of the real estate rather than just the cost basis. This deduction is generally capped at 30% of your Adjusted Gross Income (AGI). If your property’s value exceeds this annual cap, the IRS allows you to carry forward and deduct the remaining balance for up to five consecutive tax years.
💡 The Cost Basis Alternative
In specific tax scenarios, donors may elect a customized filing option to deduct only the property’s original purchase cost basis. Choosing this alternative method allows you to raise your annual IRS deduction cap up to 50% of your AGI. Always consult your CPA to see which calculation optimizes your portfolio.