Land is an asset that is often overlooked when individuals are considering ways to make a gift to the Keck School. Unimproved land (without buildings) often has significant capital gain potential and property taxes can become a financial drain.

There are several benefits to donating land or buildings, including income tax deductions, reductions in your taxable estate, and/or an increase in annual income.

An outright gift of property will provide a charitable deduction for the full fair market value of the property. If the gift value exceeds deduction limits in the year of the gift, the unused portion of the deduction can be carried forward into the succeeding five years.
For example, if your annual income were $125,000, and you donated a property worth $200,000 (with a cost basis of $25,000), you would have the following benefits:

• Avoidance of $175,000 in capital gains, which, if sold, would result in a $35,000 tax.
• A $200,000 charitable deduction, which over a six-year deduction period of total income of $750,000, you could deduct the entire gift, saving some $62,000 in income taxes. (effective tax rate of 31%)
• Avoidance of estate taxes (maximum rate=55%), which at the net cost of your outright gift ($200,000 - $62,000 * 55%) would save $75,900.
• The satisfaction of making a major gift to the Keck School of Medicine for a worthy purpose you designate in medical care, research, or education.

A gift in return for a life income, such as an annuity or a charitable remainder trust is also an excellent option to avoid capital gain tax and remove an asset from an estate. This saves estate taxes, and results in the receipt of a life income, either fixed or variable with potential for growth.

A building gift is a home, vacation home, apartment building, office building, or any property with a building on it. These can be handled easily with a deed of transfer and can be directed to the Keck School of Medicine as an outright gift or life income gift. The transfer must include an inspection by USC, and a valid appraisal of the property, paid for by the donor. The property must be approved by USC before the gift will be accepted.

For those who want to donate land and arrange a life income, benefits are similar, except that the charitable deduction is reduced. However, it is still an excellent way to divest a small or unproductive property, or one that is difficult to manage.