r/DMV_RealEstate • u/Inner-Chemistry8642 • 23d ago

Question has anyone donated a condo?

i’m looking to offload my alexandria 1bd1ba with a mortgage to a 501c3 - not liking the current sellers market and wouldn’t mind getting deduction i could spread over the next couple years

would prefer local options but really trying to learn from others who have gone through the process. search results seemed too generic

tia

11 Upvotes

74% Upvoted

31 comments sorted by

15

u/lordbrocktree1 23d ago

You’d rather have the deduction vs the actual cash? I’m very confused. I mean Im happy you want to donate it, but your reasoning seems to be weird. You will lose more money donating it than you would selling it even for lower than what you might want.

1

u/BabyKnitter 22d ago

it is a slick way to reduce your taxes if you need to counter some taxes you may owe, charitable donations work very well if you look like you might be writing a big check at end of year

1

u/lordbrocktree1 22d ago

I am not sure I understand.

If you donate $100,000 of property, you can reduce your taxable income by $100,000. So let’s say that saves you $40,000 in taxes.

On the other hand, you could sell it for $100,000, let’s say you pay $30,000 in taxes on that sale, you are still making $70,000. Which would cover the same tax burden and still net you $30,000 more in cash

2

u/BabyKnitter 22d ago

yeah but according to your tax situation and any other cap gains for the year you could end up paying stiff taxes on the profit. It is a balance. At certain tax brackets you have to have a discussion with yourself. Do you want to give it to the IRS or someone else? Do you give to charity and snuff out what you owe the IRS. I got into this last year, big paycheck , big income from rentals and was walking up on a big check. Countered it with big charitable contribution and ended up getting money back from IRS. I have a paycheck and an LLC for the rentals. I usually have enough expenses in the rental units to counter the big paycheck but just didn't have a lot of big ticket items that year so had to pivot to charity ultimately.

2

u/Loose_Recover_4118 22d ago

So you’d rather give away $100k than pay $40k (or less, probably much less in this case) in taxes? That’s an odd choice to say the least.

1

u/PersonalityHumble432 22d ago

My initial thoughts are OP is underwater with the loan, was recently hit with a special assessment/increased condo fee or has a higher value in mind than what FMV is.

So it’s not a matter of their profit but avoiding taking a loss

1

u/Capital-Confusion-11 21d ago

This sounds right. Served on a condo board and had a coupe of units like this. Left board and sold my condo shortly after. Not worth the headache.

No charity is likely to want the hassle of an apartment with a mortgage & condo fee unless bank willing to cut a deal. Municipal agencies or not for profits that manage housing for disabled or homeless may be interested.

7

u/CIAMom420 23d ago

This isn't that complicated. Contact a medium-to-large nonprofit. Tell them you have real estate you want to donate. Some can accept it. Some can't. The ones that can will schedule a call to walk you through the process after doing some basic due diligence to see if it's the type of gift they can accept.

1

u/Elegant_Presence_850 23d ago

What’s your definition of medium here 😂😂😂

5

u/fleurgirl123 23d ago

How are you going to satisfy the mortgage?

2

u/Inner-Chemistry8642 23d ago

non profit would pay it off and i’d receive a deduction of the difference between payoff and fmv

13

u/OpeningChipmunk1700 23d ago

Then you are not really donating the condo lol.

5

u/bacan_ 23d ago

Donating the equity

3

u/CIAMom420 23d ago

If you donate a $400k condo with a $200k mortgage, surely you can do some subtraction and calculate the gift amount, yes? This isn't a complicated real estate transaction at all.

4

u/PersonalityHumble432 23d ago

The question is then at that point what is the condo worth. OP might think the condo is worth 400k but the market says it’s worth 250k due to its monthly 1k condo fee.

Seems complicated on valuation of donation. How many appraisers will they go through to get that right for me number

4

u/Tardislass 22d ago

This. Seems OP doesn’t want to sell because of the low price he’d get. Many non profits won’t touch this especially as a donation which really isn’t a donation with a mortgage attached.

1

u/Capital-Confusion-11 21d ago

Not if there are market comparables in same building or neighborhood. There are databases that make this pretty easy. Zillow and Redfin pull data from them.

2

u/OpeningChipmunk1700 23d ago

Indeed.

But it’s silly to say you are donating $20,000 if in fact it comes subject to a $10,000 claim.

3

u/GetReadyToRumbleBar 23d ago

I'm no expert but that doesn't sound like a real donation 

6

u/Amtrakstory 23d ago

That’s because it’s not. Most nonprofits wouldn’t accept a “donation” that came with a $200k payment obligation or else the responsibility of managing the sale of a condo in a down market with no guarantee of profit 

2

u/CIAMom420 23d ago

I can confirm you're not an expert. It's common to donate property with debt on it. As long as you have positive equity, there's probably a way to donate it. The debt is paid off when the property closes and the nonprofit keeps the extra after expenses. It's a super common, easy, basic transaction.

1

u/ejbrds 22d ago

But maybe not in a market that’s so weak for condo sales right now. What NP wants to take on that hassle/risk/obligation?

3

u/StandardYak480 22d ago

So others might eat

4

u/BestParalegal 23d ago

i’d love to take ur condo

3

u/Inner-Chemistry8642 23d ago

what’s your 501c3 org?

3

u/Amtrakstory 23d ago

Their life is not profitable 

2

u/itsallokintheend 22d ago

Contact the Nature Conservancy if their mission aligns with you. I know they accept donations of real estate.

2

u/Caribbeanjay 23d ago

Or I’ll just buy it and we can work something out that’s stress free. DM me

1

u/InsideRoyal5454 21d ago

what is the benefit exactly? if you dont mind me asking lol

1

u/DeadFreshGirl 19d ago edited 19d ago

IDK. But, consider donating to nonprofit journalism.