Tax on Donations: Are Homes Donated to Charity Tax-Deductible?

If there’s one thing we can all agree on, it’s our unified disdain for tax season. We understand the need for them and we understand we don’t have a choice, but it’s hard knowing we don’t have much control over where that percentage of our hard-earned money goes and how it’s used.

When tax season rolls around, every citizen in the US is looking for ways to reduce the amount they owe in taxes – either by lowering their annual tax bill or by increasing their annual tax return. It doesn’t matter how much money you earn, we all think the same during tax season.

What most people don’t understand is there are numerous ways to greatly reduce your taxable income and while it often requires spending money elsewhere, it gives citizens an opportunity to control where the money goes and how it’s used – instead of flat-out giving it to the Internal Revenue Service (IRS).

What are Tax-Deductible Charitable Contributions?

A tax-deductible donation is a donation of qualified goods or cash to a tax-exempt organization, which can then be listed as itemized deductions on your tax return to reduce your overall taxable income. For example, most donations made to a qualified charitable organization are often tax-deductible.

Charitable donations have long been one of the driving forces that keeps charities and other non-profit organizations going. By making these charitable donations tax-deductible, millions of Americans from across the country are now incentivized (financially) to donate to charity.



Of course, there are limitations to what constitutes a charitable donation, how much of the donation you can deduct from your taxable income, and how you go about receiving the charitable contribution deduction. For more advice or guidance, speak with a tax professional.

Are Donated Homes Tax-Deductible Donations?

Real estate donations – whether it be land, commercial, or residential – are tax-deductible. In fact, many people consider it quite an impressive tax deduction and one that some people should greatly consider – not just for the tax benefit, but knowing that it’s going to good use.

For those that have had the property for more than one year, you can deduct the full fair market value of the property – though you can only deduct up to 50% of your adjusted gross income in any one year. Don’t worry, you can carry any excess deduction into the next year for five years.

There are several restrictions and limitations when receiving your charitable contribution deduction for real estate. For example, the amount you can deduct off your taxes each year may be different depending on the appreciation or depreciation of the property you’re donating.

How to Receive a Charitable Contribution Deduction

When property owners find out about the massive tax benefits of donating real estate to a qualifying charitable organization, it’s hard not to consider it as a real possibility – especially considering the ‘carryover’ effect that allows you to carry excess forward up to five years.

Here are some things to keep in mind before receiving your charitable contribution deduction:

• When doing your taxes, make sure you itemize deductions by filling out Schedule A (if it exceeds the standard deduction)
• Make sure you’re donating to a ‘qualifying organization,’ which is laid out by the IRS
• Hold onto any and all documentation (confirmation letter from charity, Form 8283) and/or receipts for your contribution
• Make sure you get the home appraised by a professional to get the fair market value
• When choosing a charitable organization to donate to, choose a charity you believe in
• Know that you’re doing this for a good cause and you should feel good about that!

If you’re unsure about the process and want to ensure you follow all the right guidelines, we recommend speaking to a tax professional that specializes in charitable contributions. They can help guide you through the process and help you get the highest tax deduction possible.

Other Benefits of Donating a Home to Charity

The tax deductions that come with donating a house to charity are undeniable and it’s why so many people go through with it every year. With that said, it’s not the only benefit that comes with charitable contributions as it not only changes the life of the taxpayer, but it helps other people in need too.



Let’s take a look at some of the non-tax-related benefits of donating a home to charity:

• Donating to charity makes you feel good about yourself
• Charities would be nothing without donations – they need your help
• You get to choose a charity that you believe in for personal reasons
• You can rest easy knowing your contribution is helping someone in need
• Gives you a greater sense of meaning and purpose in life
• Lead by example because things like these reciprocate over time
• You can avoid capital gains taxes in some scenarios
• You can donate the home in memory of someone or in someone else’s name (a loved one, close friend, family member)

There’s a lot of good that comes from charitable donations and it doesn’t just have to be in the form of real estate – it also includes cash donations, goods, vehicles, furniture, equipment, clothes, and household items. Charitable organizations depend on donations -- whether it be a cash or non-cash contribution -- in order to help those in need.

Donate Your Home to Old Glory Housing!

Do you have a depreciated home that you’d like to consider donating to charity? Are you looking for someone to take that property off your hands and find a more charitable use for it? If you answered yes to either of those questions, we first want to thank you – you’re good-hearted!

At Old Glory Housing, we turn run-down, outdated, and unlivable homes into fully-functioning, low-income, affordable housing for those that need it most. We’re a registered 501-3(c) organization, so your house donation is tax-deductible if you meet the other charitable deduction qualifications.

As licensed contractors, we don’t mind getting our hands dirty with rebuilds, renovations, repairs, or remodels – in fact, we enjoy it. After all, these homes go to real people that were put in a bad position and could be what changes their life for the better. Don’t hesitate to contact us today to learn more about donating a house to charity!