Donating to a 501(c)(3)

• Avoid capital gains tax: You can avoid paying capital gains tax on the appreciation of the donated property.
• Charitable tax deduction: You can claim an income tax deduction for the fair market value of the property, potentially reducing your tax liability for up to five years.
• Remove burden of ownership: After the transfer, the organization takes on all responsibilities, including maintenance costs, property taxes, and liability insurance.

Donating to a nonprofit that is not a 501(c)(3)

• No income tax deduction: Since the donation is not tax-deductible, you do not receive the same financial incentive.
• Potential capital gains tax liability: You may still be responsible for capital gains tax if you sell the property and donate the cash to a non-501(c)(3) organization.

How to protect yourself donating to a 501(c)(3) and maximize tax benefits

• Verify the organization’s 501(c)(3) status and that it is in good standing with the State of Illinois. The National Women Veterans United and United Relief Foundation meet both qualifications.
• Consult with a professional. Work with a tax or financial advisor to understand your specific situation and the implications of donating real estate.
• Get a qualified appraisal. For real estate gifts valued over $5,000, you will need a qualified appraisal to substantiate the charitable deduction on IRS Form 8283.

The Urban Renewal Project Chicago team would welcome the opportunity to support your generosity. We’re here to answer your questions and help facilitate your real estate donation—always with care, transparency, and at no cost to you.