Estate Donations: A Philanthropic Alternative to Resale
Posted by Sarah Meslink, Luxury Product Manager
Did you know that the luxury furnishings and collectibles in your home may be worth more to you in tax savings than by selling them? There are multiple reasons for needing to donate or sell a large number of items: downsizing due to a real estate sale, relocating, estate transaction, or just a design refresh.
Giving tangibles, such as furniture, décor elements, and artwork to a charitable organization is a financially savvy solution that many High-Net-Worth homeowners are not aware of.
Let’s compare selling vs. a philanthropic donation.
Pros: There’s only one –
1) You receive cash (less seller’s commissions and other fees)
Cons: Many –
1) If you sell items (e.g., artwork) that have appreciated in value, you are liable for the capital gains tax
2) Needing to find multiple companies to sell, with it brings complicated logistics and tracking
3) Potentially long wait times for items to sell
4) Cost of storing/transporting and picking up items that do not sell
5) The awful feeling that your valuable possessions were devalued
Pros: Numerous –
1) You receive a significant tax deduction based on an independent third-party appraisal
2) No capital gains tax on appreciated donations
3) “One-stop donating” – all the items being donated to one charity
4) Free white-glove packing and transporting of all your luxury donations from 5 pieces to 500 or more
5) The good feeling of receiving an excellent value while supporting a charitable mission
Cons: Just one and it's minor –
1) The cost of the appraisal
Do the math, the appraisal is a fractional investment against the overall financial gain.
Both case studies below are actual examples of whole household donations of luxury furnishings as a result of a real estate sale.
1. $10 Million Mansion, Southampton, NY
Donation. Art, Antiques, Lighting, Furniture, and Home Décor
Tax Deduction. $570,000+
Tax Savings (49%). $279,000+
Pack/Transport Savings. $33,000+
Appraisal Cost. ($15,000)
Total Project Savings $297,000+
2. $11 Million Mansion, Palm Beach, FL
Donation. Antiques, Furniture, and Home Décor
Tax Deduction. $119,000+
Tax Savings (37%). $44,000+
Pack/Transport Savings. $21,000+
Appraisal Cost. ($20,000)
Total Project Savings $45,000+
The donation process is simple:
The Donor contacts Renovation Angel with information on the project –
location, overall description, estimated number of items, and timeline.
The Nonprofit conducts a one-time inspection of the property with an IRS-qualified third-party independent appraisal company.
The Appraiser gives the donor an estimated fair market value (FMV) and cost for appraisal.
Become pleasantly surprised with the advantages of a philanthropic donation of furnishings.
To learn more, contact Sarah Meslink, Luxury Product Manager.