Donating Commercial Real Estate to Charity

Find out how to get started with donating commercial real estate, the steps required, benefits, and FAQ.

Donating Commercial Real Estate to Charity

Find out how to get started with donating commercial real estate, the steps required, benefits, and FAQ.

We do our best to make it easy for you

Commercial property owners considering a charitable donation can find the process daunting.

Managing the wants and requirements of a board of directors, investors, or key employees can prove to be a complicated experience, and getting rid of the property can be challenging.

We simplify the process for owners, like you.

By donating your commercial real estate you take advantage of several tax break options.

We can handle commercial spaces, commercial land, industrial real estate, and flex warehouse spaces and are there to support you with the documentation and logistics throughout the process.

As a non-profit organization taking charge of your property in as little as three weeks, we help you maximize your tax benefit while staying tax compliant.

Follow along to understand everything you need to know about donating your commercial property.

Table of contents

Commercial real estate
donation 101

The challenge of selling

When putting up your commercial real estate on the market, you have a responsibility to manage and sell the property professionally and in compliance with the local tax code.

This type of process means having to deal with a variety of fees and other liabilities often associated with the property and can include dealing with:

  • Rent
  • Environmental
  • Cleanup taxes
  • Location
  • and other fees

Once you actually make the sale, you are subject to capital gains tax on the earned revenue of the sale.

By donating your property, you avoid all responsibilities and receive tax deductions.

We do everything to make it a smooth sailing process for you.

Read on to understand how to get started in the best and safest way.

The benefits of donating your commercial real estate VS selling it

When you choose to donate your property, you:

  • Can reduce or completely eliminate your real estate tax
  • Are exempt from capital gains tax (which you are subject to by selling it)
  • Are eligible for many other tax deductions
  • You also have the knowledge that your donated property will go to helping better the lives of children through our charity
  • As you will see in our how it works section, donating your commercial property is incredibly efficient and easy

Selling commercial properties that need repair or real estate in a bad location can make it extremely difficult and every month that goes by, the bills keep piling up.

By working with a non-profit organization that has been doing this for many years, you could rest assured that after a thorough review, we will give you a quick and meaningful answer for any type of property.

We list the types of properties we accept below.

Other benefits include

  • Avoid the challenges of selling listed above
  • Avoid much of the bureaucracy and red tape that revolves around property maintenance
  • Avoid changing bills that might randomly jump at you
  • A large experienced team by your side

SIDE TIP: Speak to your accountant

We always advise to fill out the form, ask us questions and then discuss it with your financial advisor.

Donating commercial real estate is made easy from our end but it’s always good to understand the deductions that are available, as they are based on your corporate structure.

How to donate your commercial real estate to charity

As with every donation, the whole process takes between 3-6 weeks from start to finish.

If your commercial property is approved for donation, and we accept it, then we will prepare all necessary documents so all you’ll need to do is sign on the dotted line.

We guarantee that no matter the type of commercial real estate or ownership type, you will receive the highest tax deduction while following tax guidelines.

Steps to take

  • Tell us about your property
  • Our expert team reviews each commercial property to see if it’s a good fit
  • Sign the closing documents and return them to us
  • Leave the rest to us as we take over all other property responsibilities, sending you a tax-deductible receipt

The types of commercial properties we accept as donations

Commercial property includes a wide range of property types.

What’s considered a commercial property

These are physical spaces designated for commercial use.

Primarily falling under two categories:

  • Commercial building
  • Commercial land 

Below are some examples of commercial spaces you can donate.

Industrial

Manufacturing and distribution centers, cold storage facilities, service parks, flex facilities/warehouses, and R&D centers.

Example of commercial donation: Industrial Zone

Retail

Office and residential storefronts, grocery stores, daycares, banks, and freestanding establishments can all be donated as part of a commercial property donation.

Example of commercial real estate donation: Convenience store

Shopping Center

Large commercial retail facilities such as shopping malls, outlet malls, community and neighborhood centers, and airport retail space.

Example of commercial real estate donation: Plaza

Specialty Spaces

Specialty spaces can be particularly tricky when trying to sell.

Religious establishments such as churches or synagogues, schools, self-storage facilities, car washes, and others are very particular property types that do not always have ‘ready to go” customers.

Example of commercial real estate donation: Car wash

Office

You may be upgrading or outgrowing your current space, and you are looking for a new data hosting site, creative space, work unit, or residential-style office.

Either way, office space is a worthwhile donation to make as it provides a tax deduction and eliminates your capital gains tax.

Example of commercial real estate donation: Empty office space

Healthcare

As a niche market, healthcare spaces such as doctor offices, medical clinics/hospitals, elderly care facilities, and rehabilitation centers are all difficult sells, dilapidated or abandoned ones no less.

They can remain on the market for years as your financial burden to these places continue.

When you donate, you immediately remove any financial and legal obligations associated with the property and you can move on with your business endeavors.

Example of commercial real estate donation: Outside of a clinic

Hospitality

Hotels, motels, and casinos require a large amount of upkeep.

By donating your property and getting rid of unwanted costs, you save your business the necessary money to grow and progress.

Example of commercial real estate donation: Motel sign

Sports and Entertainment

Theaters, arenas, sports fields, pools, amusement parks, and athletic ranges are all types of commercial real estate we accept.

Example of commercial real estate donation: Basketball court outside

Frequently Asked Questions

Is donated office space tax deductible?

Yes. Office space is tax deductible as a commercial property.

Is it better to sell or donate your commercial real estate?

Better is a matter of perspective.

Selling a property can be lucrative but involves a lot of red tape and taxes. When you donate your commercial property, in addition to feeling that you are doing something for the greater good, you receive a tax exemption and deduction and relieve yourself of all property responsibilities, fast and easily.

Is a donation of commercial use of property tax deductible?

Yes.

Depending on your organization, you can receive large, long-lasting deductions and you are immediately exempted from any capital gains tax you would have had to pay as a result of a sale.

How does the approval process for commercial property donations work?

Our team of experts reviews your snapshot form and conducts a thorough appraisal of your property.

They will then make a final evaluation of your house and, if approved, will forward you the required documents to sign over your property and relieve you of all your associated responsibilities.

How long does it take to donate commercial real estate?

3-6 weeks from the moment we receive your snapshot form to the when you sign the closing documents.

What’s the tax deduction for commercial property donations?

If you hold a controlling interest in the corporation and the donated property has been held for more than one year, the corporation may deduct up to ten percent of the net profit of the corporation. In this case, fair market value must be reduced by the amount of accumulate depreciation.

If the corporate donor has elected “Sub. S” status, then the contribution will be reported on the individual shareholders K1 and may be deducted on the individual return.

Up to how long can the tax deduction be claimed for when donating a commercial property?

Up to 5 years post-donation.

How can I find the fair market value of my commercial property?

Our property experts will review your property during the approval process, but you are always welcome to use an independent appraiser.

What if my commercial real estate is in a bad condition and needs a lot of repairs?

We take full responsibility for any and all fees your property may have incurred once you donate your property.

Is there any type of commercial real estate that’s not accepted?

We accept any type of commercial property, however, our property evaluators have their criteria for an ‘approved’ property and can deny a property from donation.

What if my commercial property has a lien or mortgage on it?

Our experts will review your property and if it’s something that makes sense for both of us, we will accept the donation.