When Max and Christina* learned that the property manager of their California rental home was retiring, they saw giant headaches ahead.
For 15 years, they had depended on their faithful and competent property manager to deal with the problems of collecting late rent, making needed repairs and the like, but now, Max said, “there was no way we’d have the mental energy to deal with all that ourselves from [our home in] Texas.”
The good news was that the home’s value had greatly appreciated since they purchased it 1973. The bad news was that if they sold it, Max and Christina would end up paying over 25 percent in state and federal taxes.
That’s when Max and Christina met with their lawyer, who advised them of other possibilities. One option in particular appealed to the couple: donating the property to their favorite charity, the Lutheran Heritage Foundation.
“We entered into this situation with the belief that the Lord God gives us a surplus to see what we’ll do with it. That’s key,” Max emphasized. “He gives everybody a surplus, more than we need, to see what we will do with it. Scripture tells us that ‘Where your treasure is, there your heart will be also.’”
As Max and Christina mulled their options, gifting the property to LHF presented several advantages.
“If we sold the house, we would pay that income tax,” Max explained. “But if we simply donated the property to LHF to sell, we could then take the charitable donation on our income tax for the next 5 years. By making a gift of it, we’re not receiving any money, so there’s no tax for us. And LHF, being a 501(c)3 organization, is able to receive the gift and not pay any tax when they sell it. So we’re able to give the value of the house tax-free, and LHF gets the whole thing.”
Having seen LHF at work for themselves during short-term mission trips to Southeast Asia, Max and Christina felt confident in the mission’s stewardship practices.
“We had the trust and faith that LHF was the most practical, most efficient way of glorifying God that we knew – the best bang for your buck,” Max said. “Entrusting this house to LHF is going to solve our immediate earthly problem of dealing with the property, and it’s going to be our great gift to the Lord for the rest of our lives.”
When considering a gift of property to LHF, Max recommends consulting with a lawyer. “If it’s a fairly clean ownership, fairly straightforward process,” he said. “The key thing to remember is that you have an asset, and you can do far more by making the gift than you could be taking it out for your own benefit.
“When you consider that every $5 provides a book about the Savior in a language someone on the other side of the world can understand, well golly, this could benefit not just hundreds, but thousands of people!”
NOTE: Max and Christina’s strategy also applies to gifts of stocks. By donating the stock directly to the LHF mission, you avoid capital gains taxes. Consult your lawyer or tax professional for advice and direction. Please contact LHF before making any property gifts.
*Donors asked that their real names not be shared