How do people inherit property in Chicago?

Inheriting property has been a part of American history for as long as America was formed. If you’ve ever had someone in your family pass away of old age or unexpectedly, you could possibly inherit a piece of Chicago property. Chicago real estate comes in many forms from an empty lot to a single-family home, commercial property, and rental properties. Some people who inherit a house may move into that house. Children of a landlord may continue running the rental business. However, in both of those situations the opposite is true. Owning an inherited Chicago property can often become costly if you decide to hold onto the property and do little with it.

What does it mean to donate property to a nonprofit 501(c)3 organization?

Donating property to a nonprofit 501c3 means that you are transferring your real estate to a charity. The charity does not pay you for the donated property, but you can receive significant tax incentives to donate real estate. Once the title and paperwork have been completed, the 501c3 organization can then use the property however best benefits the organization. Some examples of how a nonprofit will use donated real estate include: office space, warehousing and storage, a school or children’s club, or for resale.

Can I donate a house to a nonprofit?

Anyone can donate inherited property to a charity. Though when doing so, you should always talk to your financial advisor before the donation. This is because there is important paperwork and tax considerations you need to know prior to property donation. In addition, there are three ways to donate property:

1. Direct Gift – smoothest process.
2. Bargain Sale – Selling property to a charity at a significantly reduced price.
3. Charitable Remainder Trust – complicated, yet preserves income for future generations when you own a high-value property.

5 benefits of donating inherited property.

The question that frequently comes up is why? Why would I donate my inherited real estate to a nonprofit organization? Well, honestly, there are as many answers to that question as there are people donating property.

For many Chicago residents donating houses to charity, you can sum up their reasons into five benefits to donating inherited property.

Avoid paying capital gains taxes.

Capital Gains Tax (CGT) is the tax on profit for the sale of a property. For example, if you sell real estate, you are also responsible for paying the tax on the profit from selling that property. If you donate inherited property to a charity, you do not need to pay Capital Gains Tax.

Receive a charitable income tax deduction.

Receive a charitable income tax deduction which is an added bonus to not paying Capital Gains Taxes. So, not only do you not have to pay CGT, but you will also receive a charitable income tax deduction based on the market value of your property.

Increase retirement income with Charitable remainder trust.

As mentioned earlier, the complicated process of a Charitable Remainder Trust can provide a benefit to you and your children by slowly releasing transferring ownership of a property. At the same time you are donating valuable property to a charity.

Help to improve the local community

Philanthropy is an important way for communities to maintain programs that benefit, children, the elderly, less fortunate, and the community as a whole. Your inherited charity real estate donation will help to improve the lives of many people.

It’s a feel-good thing.

Maybe you want to leave a legacy to your family name. Maybe you like to see the impact that a specific 501c3 can make on the community. Or maybe doing nice thing is in your blood and helps you feel all fuzzy and warm on the inside. Whatever your incentive, doing nice things like donating inherited property to a charity, feels good.

Are you ready to donate inherited property?

If you are interested in donating an inherited house, rental property, or commercial real estate contact the Urban Renewal Project, we’d like to help you donated to a worthy cause in such a heartfelt way.