Should You Donate or Sell Your Vacant Land?
When you own land that you don’t need or can’t use, you may be faced with a difficult decision: whether to donate the property to charity or sell it to the land investor. Both options have their own advantages and disadvantages, and choosing the right one depends on your priorities and goals. Let’s explore the benefits of selling land to the land investor compared to donating it to a charity.
Benefits of Selling Land to the Land Investor:
- Financial Gain: One of the most obvious benefits of selling your land to the land investor is that you can receive immediate financial gain in return. You can use the money to invest in something else, pay off debt, or contribute to your retirement account.
- Immediate Cash Flow: When you sell your land to the land investor, you can receive a lump sum payment upfront. This can provide you with faster cash flow, which can be beneficial if you need to cover unexpected expenses or invest in something else.
- No Ongoing Obligations: Selling your land to the land investor typically means that you have no further obligations or responsibilities. Once the sale is complete, you’re free to move on and focus on other things.
- Simplified Process: Selling land to the land investor is generally a simpler process than donating it to charity, selling it yourself or with the help of an agent. After you agree on the price, closing time through escrow or attorney can take as little as 10 days and it is a straightforward process compared to donating land to charity. Charity might require you appraising the property first (especially if land is valued more than $5,000) or rejecting the property altogether because of the marketability issues.
- Potential for Higher Value: Selling your land to the land investor could result in a higher value to you than tax benefit if you donated it to charity. Even if sale price and donated charitable deduction are of equal value. (Please consult your accountant).
Benefits of Donating Land to Charity:
- Tax Benefits: When you donate land to a charity, you can receive tax benefits, which can help offset the cost of owning the land. You can claim a charitable deduction on your tax return for the fair market value of the land, which can be beneficial if you have a high income and need to reduce your tax liability. (Please consult your accountant).
- Social Impact: Donating your land to charity can make a significant impact on your community or a cause that you care about. It can be a way to give back and make a difference in the world.
- Legacy: Donating land to charity can create a lasting legacy that you can be proud of. You can leave a positive impact on the world and ensure that your land is used for a worthwhile cause.
- Environmental Benefits: Donating land to charity that works as a conservation organization can help protect the environment and preserve natural resources for future generations. It can be a way to ensure that your land is used for a good purpose and helps the planet.
In conclusion, there are benefits to both selling your land to the land investor and donating it to charity. If you’re looking for immediate financial gain and simplicity, selling your land may be the best option. However, if you’re looking for social impact, tax benefits, legacy, or environmental benefits, donating your land to charity could be the way to go. It’s important to consider your goals and priorities before making a decision and at the same time we cannot stress enough importance of talking to an accountant to see which option is more financially beneficial in your particular situation.
We are not attorneys, accountants or financial advisors, nor we holding ourselves out to be, and the information contained in this post is not a substitute for financial advice from a professional who is aware of the facts and circumstances of your individual situation.
