Appreciation & Depreciation
Discussions of gifts of real property (including stock and real estate) often assume that the property has appreciated (grown) in value since the time you acquired it. The difference between your purchase price and this higher market value is known as “capital gain.” When you dispose of the property, you must recognize and pay tax on this gain (usually between 15% and 28%). If you have owned the property longer than one year (held long-term), you may be able to avoid recognizing and paying tax on the gain by donating the property to Clarkson. In instances where property has depreciated in value, it is sometimes better to sell it first and then contribute the proceeds to Clarkson. In this way you may be able to declare the capital loss as well as a gift. In special circumstances, a gift of appreciated property owned less than one year (held short-term) may make a good gift to charity (such as when the cost basis and market value are very close). As always, it is best to consult your tax advisors and Clarkson before making any gift.
Special Note: A gift of appreciated property is no longer a preference item for the alternative minimum tax and is not subject to the alternative minimum tax.
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This web page does not provide legal or financial advice, nor is it a comprehensive review of the topic. You should consult your legal and financial advisors and Clarkson University before making or planning your gift. (rev. 12/2015)
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