Real estate seems simple, but it covers a wide diversity of situations and values. For our purposes we want to define what we work with and what we don't.
We work with minimal or no value real estate.
We DO NOT work with valuable real estate.
Why? Because we provide for owners to get the best tax advantage for something they can't sell. If you can sell it, do it. Every charity would rather you donate the cash so they can pay their own bills. They don't want to work at converting something into cash at some cost to themselves.
The IRS regulations recognizes this situation and places a limit on charities that receive non-cash donation. The IRS limits the amount of income deduction the donor can take without having to pay for a licensed appraisal. The IRS requires the charity retain ownership for a minimum of 36 month before letting the donor off the hook in case a lower actual value can be established. The way they do this is require the charity to file an IRS Form 8282 - Donee Information Return (Sale, Exchange, or Other Disposition of Donated Property) - * look on page 3 if they transfer ownership to anyone else within that time. This tells the IRS what the original donation credit was and what the actual resell price was so the IRS can order an audit of the donor to recover excess tax benefits they received if they claimed a higher limit that the $5,000 allowed deduction without an appraisal. Be careful who you donate to. VRI ALWAYS retains properties for a minimum of 36 months.
Who would want to use us? Consider these situations.
- Vacant lots in depressed areas.
- Damaged structure not worth repairing, especially after receiving insurance proceeds.
- Squatter occupied property that is to much trouble to try to recover and get fixed back up.
- Legally restricted property such as zoning, non-access locked, environmental disasters, and remainders of eminent domain seizures.
- Lease locked property not returning a profit.
- Any property for any reason that can't be sold for more than $5,000 quickly and easily.
Since VRI doesn't resell the property, it gains no value from receiving it as a donation. Because the donor can and usually does receive actual cash benefit from the donation and the release from future obligations, VRI ask for an additional cash fee to do the process and grant the donor the tax benefits.