Giving Appreciated Property to Charity in Oregon

If you own property in Oregon that has increased in value over time, you may be wondering how to make the most of your assets. One option that can benefit both you and your favorite causes is to donate your appreciated property to charity. 

Donating appreciated property, such as real estate, stocks, or mutual funds, can provide significant tax advantages for you while supporting the charitable organizations that matter to you. Here are some of the benefits of giving appreciated property to charity in Oregon: 

•   You can avoid paying capital gains tax on the appreciation of your property. If you sell your property and donate the proceeds, you will have to pay tax on the difference between your cost basis and the sale price. However, if you donate your property directly to a qualified charity, you can bypass this tax and save more for yourself and for charity. 

• You can claim an income tax deduction for the fair market value of your property. The fair market value is what a willing buyer would pay a willing seller for your property at the time of donation. You can deduct this amount from your taxable income if you itemize your deductions on Schedule A of Form 1040. The deduction is subject to certain limitations based on your adjusted gross income (AGI) and the type of charity you donate to. 

• For donations of cash to public charities, such as schools, hospitals, or churches, you can deduct up to 60% of your AGI. For donations of appreciated property to public charities, you can deduct up to 30% of your AGI. Any excess deduction can be carried forward for up to five years. 

• For donations of cash or appreciated property to private foundations, such as family foundations or donor-advised funds, you can deduct up to 30% of your AGI for cash and up to 20% of your AGI for appreciated property. Any excess deduction can be carried forward for up to five years. 

• You can make a lasting impact on the causes you care about. By donating appreciated property to charity, you can support the mission and vision of the organizations that align with your values and goals. You can also create a legacy of generosity that inspires others and makes a difference in your community. 

How do I donate appreciated property to charity in Oregon? 

 The process of donating appreciated property to charity in Oregon may vary depending on the type and condition of your property and the requirements of the charity you choose. However, here are some general steps that apply in most cases: 

•   Identify a qualified charity that accepts donations of appreciated property and has a purpose that matches yours. 

• Contact the charity and inform them about your intention to donate your property. Ask them about their policies and procedures for accepting such donations. 

• Obtain an independent appraisal of your property from a qualified appraiser who follows IRS (Internal Revenue Service) guidelines. You will need this appraisal report for tax purposes and for substantiating the fair market value of your donation. 

• Transfer the title or ownership documents of your property directly to the charity or to a trustee if you are using a charitable trust. 

• Obtain a written acknowledgment from the charity that includes the name and address of the charity, the date and description of your donation, and whether any goods or services were provided by them in exchange for it. 

• File Form 8283 with Form 1040 if you claim a deduction over $500 for noncash charitable contributions. 

• Keep all records related to your donation, such as appraisal report, title transfer, receipt, and correspondence with the charity, for at least seven years after filing your tax return. 

  If you are interested in giving appreciated property to charity in Oregon, please contact us today. 

Does Oregon have a gift tax?

No, Oregon does not have a state-level gift tax. However, gifts that are subject to federal gift tax may also have an impact on an individual's Oregon state income tax liability.

Under federal law, individuals can make gifts up to a certain amount without incurring a gift tax. This is known as the annual exclusion, which is $17,000 per recipient in 2023. For example, if an individual gives $17,000 to their child in 2023, that gift would not be subject to federal gift tax.

As tax laws can be complex and subject to change, it's always a good idea to consult with a qualified tax professional or estate planning attorney to understand the tax implications of gifts and other transfers of property.

What is the importance of a schedule K-1 for an estate?

A schedule K-1 is an important tax form that is used to report the income, deductions, and credits of a trust or estate to the beneficiaries. It is used to allocate the income, deductions, and credits of the trust or estate to the beneficiaries based on their respective ownership interests.

The schedule K-1 is important because it allows the beneficiaries of the trust or estate to report their share of the income, deductions, and credits on their personal income tax returns. Without a schedule K-1, the beneficiaries would not be able to report this information and may end up paying more in taxes than they should.

In addition to allocating the income, deductions, and credits of the trust or estate to the beneficiaries, the schedule K-1 also provides information about the type of income being reported and any tax credits or deductions that are available to the beneficiaries. This information is important for the beneficiaries to know in order to accurately report their share of the income on their personal income tax returns.

Overall, the schedule K-1 is an important tax form for both trusts and estates, as it ensures that the income, deductions, and credits of the trust or estate are properly allocated to the beneficiaries and reported on their personal income tax returns.

What is the 65 day rule for estates and trusts?

The 65-day rule for estates and trusts is a provision in the United States tax code that allows trustees or executors of estates to make certain tax decisions after the close of the tax year, but before the due date of the tax return.

Specifically, the rule allows trustees or executors to make certain elections related to the distribution of income and deductions to beneficiaries of an estate or trust for the prior tax year. This can have significant tax implications for both the estate or trust and the beneficiaries.

To take advantage of the 65-day rule, the trustee or executor must file an election with the IRS on or before the 65th day after the close of the prior tax year (which is usually March 6th). This election allows the trustee or executor to treat certain distributions as having been made in the prior tax year, even if they are actually made in the current tax year.

It's important to note that the 65-day rule only applies to certain types of distributions, and there are specific requirements that must be met in order to qualify. Therefore, if you are a trustee or executor of an estate or trust, it's recommended to consult with a tax professional to ensure you are following all the necessary rules and regulations.

2018 Oregon Estate Tax Rates

The State of Oregon levies a tax on taxable estates that have a value of more than $1 Million.  Estates of less than $1 Million are exempt from the Oregon Estate Tax.  This is a separate from the Federal Estate Tax.  In 2018, individuals with less $11.2 Million and couples with less than $22.4 Million are exempt from the Federal Estate tax.  The top Federal Estate tax rate is 40%.  More information on determining the Federal Estate Tax rates can be found at IRS.gov.

Taxable Estate Equal to or more than:	Taxable Estate less than:	Tax rate on Taxable Estate amount more than column 1
$1,000,000	$1,500,000	$0 + 10%
1,500,000	2,500,000	50,000 + 10.25%
2,500,000	3,500,000	152,500 + 10.5%
3,500,000	4,500,000	267,500 + 11%
4,500,000	5,500,000	367,500 + 11.5%
5,500,000	6,500,000	482,500 + 12%
6,500,000	7,500,000	602,500 + 13%
7,500,000	8,500,000	732,500 + 14%
8,500,000	9,500,000	872,500 + 15%
9,500,000		1,022,500 + 16%