Gifts of Real Estate
A gift of real estate to Southwestern University provides a charitable deduction for the full fair market value of the gift - up to 30 percent of your adjusted gross income if you have held it for more than six months - with the usual five-year carryover.
As with other appreciated property, transferring the asset to the University avoids any capital gains tax in most cases. You will need to have your gift of real estate appraised by an independent appraiser to determine the value of your deduction. Also, be sure to consult with Southwestern to make sure your real estate is appropriate for the University's use. Gifts of real estate usually have a minimum equity of $25,000.
Preface
Pursuant to a resolution adopted by the Southwestern University Board of Trustees on April 28, 1995, University staff and the Fiscal Affairs Committee were granted the authority to develop and recommend to the Board of Trustees policies and procedures to govern the acceptance of gifts of real estate by the University. This policy statement has been developed in consonance with that resolution.
Introduction
It is the policy of Southwestern University to exercise business prudence and fiduciary responsibility when considering the acceptance of gifts of real estate. Therefore, the University sets forth the following procedures to govern the process by which the University determines to accept or decline offers of gifts of real estate.
Procedures
The University shall follow the below-listed procedures in determining whether or not to accept offers of gifts of real estate. University staff shall coordinate its review efforts with Bank One - Fort Worth, the University property management consultant, and shall seek input from the consultant in determining the acceptability of real estate gift offers. When considering the acceptance of real estate gift offers, University staff shall:
1) identify the donor while maintaining appropriate levels of confidentiality;
2) determine the legal and geographic description of the property, and the location of the property;
3) ascertain an estimated value of the property from the potential donor and the basis (comparables, appraisals) on which that estimated value is determined;
4) determine whether the proposed gift is a one-time gift or if it is part of a longer term gift program;
5) determine the terms and conditions of any gift program pursuant to Item #4 above;
6) inform the potential donor, in writing, of University policy and procedures governing the acceptance of offers of gifts of real estate;
7) refer all of the information generated from the above actions to the University property management consultant for review and comment, as defined in items 9 through 13 below;
8) in cases of acceptance of the gift offer (see Gift Acceptance below), obtain a title policy or other bona fide verification of title, including information on liens or encumbrances, at the time of closing.
Upon receipt of the above-stated information from the University, the property management consultant shall perform the following duties:
9) physically inspect the real estate in question and complete, as a record of the inspection, an environmental inspection form;
10) identify, as part of the physical inspection, any environmental concerns which may be readily apparent;
11) recommend to the University and to the potential donor on the advisability of an environmental survey (see Special Conditions - Environmental Surveys below) at the prospective donor's expense;
12) perform an independent assessment of the current and projected market value of the real estate in question, including an assessment of any potential income streams; and
13) conduct sufficient study of the property to permit the consultant to report its findings to University staff and the Fiscal Affairs Committee, and to recommend acceptance or declination of the gift.
Gift Acceptance
Should the property management consultant, upon inspection of the real estate, determine that an environmental survey is not warranted prior to consideration of gift acceptance, the property management consultant shall report such to the University, and shall recommend gift acceptance or declination. If the consultant recommends acceptance, the President, or his designee, may accept the gift on behalf of the University, subject to the terms and conditions of this document, or may refer the matter to the Fiscal Affairs Committee for review and action. If the property management consultant recommends declination of the gift, the President, or his designee, may decline the gift on behalf of the University, or may refer the matter to the Fiscal Affairs Committee for review and action.
Special Conditions-Environmental Surveys
Should the property management consultant, upon inspection of the real estate, determine that an environmental survey is warranted prior to consideration of gift acceptance, the property management consultant shall recommend completion of the survey. The cost of the survey shall be born by the prospective donor. The property management consultant shall review the results of the survey, and shall recommend acceptance or declination of the gift to the University staff. University staff shall refer the matter, along with the consultant's recommendation, to the Fiscal Affairs Committee for review and action.
Policy Review and Revision
This policy is subject to review by the Fiscal Affairs Committee or the Board of Trustees at any time and without prior notice. Recommended changes are subject to review and approval by the Board of Trustees. (Approved by the Fiscal Affairs Committee, January 31, 1996)
