Professionally Speaking is a paid promotional spot in B2B.
Gifts of real estate a win for the giver, community by Karlene Grabner of Oshkosh Area Community Foundation Advisors commonly help their clients achieve charitable goals through gifts of cash or stock. With careful planning, gifts of real estate can help people fulfill their charitable dreams while experiencing maximum tax benefits. These types of gifts can include land, a personal home, business and commercial property, vacation homes and condos. The Foundation has helped numerous donors give back to their community using gifts of real estate. “To a certain degree, it’s tax driven,” says Patrick Seubert, managing attorney with Seubert Law LLC in Neenah. “(Clients) get a charitable deduction that can actually lower their income tax. What you’re doing is assisting the donor in carrying out their wishes, and also providing an opportunity for the community.”
Seubert, who has helped several clients make gifts of real estate, describes the typical scenario for doing so: A couple has gifted property to their children that they purchased much earlier in their lives. The fair market value on the property has increased dramatically. If the property is sold, the children will be taxed at a rate of about 25 percent for the gains on the sale. Imagine a property purchased for $25,000 that has a fair market value of $500,000 today — the children will be taxed on a gain of $475,000. “An alternative then would be to take that property and do a charitable gift to the Foundation,” Seubert says. Real estate donations work well when handled on a local basis, where the Foundation is familiar with the donors and the property, and has worked with the financial advisor or attorney before. Seubert suggests potential donors first review the possibility of making a gift of real estate with their legal counsel and accountant. After some preliminary discussion, the Foundation
will be brought onto the team. Most importantly, he says, work with someone you trust. “(A gift of real estate) is more a facet of a complete estate plan, especially for people with larger estates,” Seubert says. “It’s really about the donors wishes and what is the best way to carry that out.” While gifts of real estate are complex, the payoff, in terms of savings from capital gains taxes and the ability to help clients achieve their philanthropic goals, can be great. Advisors who can help clients successfully gift real estate to fulfill charitable goals within their overall estate plan will be the heroes. Karlene Grabner is Donor Services Director with the Oshkosh Area Community Foundation. Grabner engages donors to build bridges between their charitable interests and community needs. Reach her at Karlene@OshkoshAreaCF.org or 920-426-3993.
The Shrinking TID May Be Coming by Joseph E. Tierney of Davis & Kuelthau, s.c. - Milwaukee
On January 22, 2016, Sen. Petrowski (R-Marathon) and Rep. Spiros (R-Marshfield) introduced 2015 Senate Bill 606 (“SB 606”) amending certain aspects of the law governing tax incremental financing districts (collectively, “TIDs” or singularly, a “TID”). SB 606 provides that an amendment to a TID’s project plan that only subtracts territory from a TID would not count against the current limit of four amendments over the life of the TID. Additionally, an amendment which only subtracts territory from a TID would not be subject to the
“12 percent” test which requires the adoption of a resolution finding that the equalized value of the taxable property of the TID does not exceed 12 percent of the total equalized value of taxable property of the particular city or village. If passed, this change to TID law might enable municipalities to redraw the TID landscape in their communities so as to enable new TIDs and close older TIDs to spur development and the growth of municipal revenue. For developers, there may be an opportunity to look at opportunities that were previously locked into a particular district and push the municipality to subtract them from the old TID and roll them into a new TID.
SB 606 has been referred to the legislature’s Committee on Economic Development and Commerce. If you have any questions regarding this article, please contact your Davis & Kuelthau attorney, or the author, Joseph E. Tierney at 414.225.1471 or jtierney@ dkattorneys.com.
NNB2B | March 2016 | 37