Real Estate
Personal Property (Books, Art, and Other Tangible Items of Value)
Life Insurance
Retirement Plan Accumulations

Real Estate
Real property -- whether residential or commercial, developed or undeveloped -- can make an excellent gift, either outright or to fund a life income plan. As every piece of land is unique, each parcel must be evaluated separately by the Davidson's Office of Planned Giving and the College's Office of Business and Finance. To be suitable for donation, title to the land must be clear and marketable, and the property must be unencumbered by mortgage or other liens. It must also be free of environmental problems such as asbestos, buried oil tanks, or other potential contaminants; an environmental audit sometimes must be performed to ensure that the College is not liable for environmental cleanup costs, which can be enormous. If the property comes with significant carrying costs for utilities, maintenance, or property owners' association dues, restrictions on sale or use of the land, or if market conditions in the area are very unfavorable, it may not be in the College's best interest to accept a particular parcel.

An independent, professional appraisal of the land is always necessary to satisfy Internal Revenue Service valuation requirements, and to establish appropriate gift credit for its fair market value.  Under IRS rules, this appraisal must be in writing and performed no more than sixty days before the date of the donation. 

It is extremely important that no signed contract for sale of the property be in existence when the property is given to Davidson. If there is one, the "step transaction doctrine" will cause the property donor to realize all of the capital gains on the sale, even though title has passed to Davidson. The existence of a listing contract with a real estate broker will not violate this rule.

In some cases it may be appropriate for the College to accept a partial interest in property. This may be an undivided fractional interest, or a future interest subject to a life estate retained by the donor. Please contact the Planned Giving Office to explore these possibilities.

Personal Property (Books, Art, and Other Tangible Items of Value)
Davidson accepts gifts of tangible items which can be used in ways related to our educational mission (art which can be added to the College’s art collection, or accessions to the E.H. Little Library, for example) or which can be sold and the proceeds used to fund other needs of the College, such as scholarships or building funds. Gifts of either type are accepted on a case-by-case basis, and normally require the approval of the academic department which would make use of an item, or of the College’s Business Office.

The Internal Revenue Code and Regulations which govern the deductibility and documentation of such gifts of art, books, and other tangible personal property are complex, detailed and subject to change, so we can give only a brief outline here. Deductibility limits differ for “related use” and “unrelated use” property. Also, if the property you are donating is worth more than $5,000, or if the total value of your non-cash charitable gifts for the year is likely to exceed $5,000, you must have a qualified independent appraisal of the property, preferably before you deliver possession of it to Davidson. Under IRS rules, Davidson is not permitted to appraise your gift, or pay for the appraisal.

The Office of Planned Giving will be happy to discuss your proposed gift with the appropriate other departments at the College, help you locate a qualified appraiser, provide appropriate tax documentation, and advise you on methods of packing and shipping your gift if it is inconvenient for you to deliver it personally.

Life Insurance
Naming Davidson as the death beneficiary of a policy on your life is simple and can be done through your insurance agent or the company office. No immediate income tax deduction is available for such a designation, however.

Davidson accepts gifts of whole-life insurance policies on a case-by-case basis, and donating a policy does create a charitable deduction. You may need to have the policy appraised to substantiate your tax deduction, and f there are loans on the policy you may need to pay them off prior to donation to avoid realizing a taxable gain. Different insurance companies have somewhat different procedures for transferring ownership of such policies, and the Planned Giving Office will be happy to help you with this process.

Once ownership of a policy is transferred to Davidson, the College will decide – again on a case-by-case basis – whether to leave the policy in force or cash it in immediately. If a policy owned by Davidson is kept in force, you may make annual gifts to cover policy premiums. These are deductible on your income tax return as they are made.

Retirement Plan Accumulations
Another advantageous way to make a postmortem gift is through making Davidson the residuary beneficiary of an IRA, 401(k), 403(b), TIAA-CREF, Keogh, or other retirement plan accumulation, or a qualified corporate benefits program.

Unfortunately, under the law currently in force, charitable beneficiary designations like these do not result in an immediate income tax deduction, and withdrawals from almost all retirement plans are taxed as current income, even if are “rolled over” directly into a charitable gift. They can, however, be made without modifying your will, and like bequests they remove property from your taxable estate, which can save estate taxes.

For more information on how to make or change these designations, you should contact your retirement plan administrator or fund custodian directly, as the formalities differ from plan to plan. As the various custodians’ procedures frequently do not allow you to designate the ultimate use of your gift, you might also wish to contact Davidson's Office of Planned Giving and make your wishes known to the College in advance.

For several years Federal legislation has been pending which would, if passed and signed, create some limited opportunities for tax-advantages contributions from IRAs; if and when such legislation is enacted, we will summarize it in The Maxwell Chambers Bulletin, our semiannual gift planning newsletter, and on these Web pages.

For more information on matching gifts, please contact James Gibert ('79) at 704-894-2469 in the Office of Planned Giving.