Educational estimate, not advice. Figures are illustrative; consult a professional for your situation.
What this calculator does
This calculator works out the federal deduction for giving appreciated real estate to a charity, outright or through a bargain sale, how much of it can be used each year under the AGI limit, the tax it saves over the year of the gift and five carryover years, and how the result compares in cash with selling the property instead.
How the math works
- Deduction. Property held more than a year is deducted at its appraised fair market value. Property held a year or less is limited to the lesser of basis and value.
- Annual limit. Long-term property: 30% of AGI to a public charity, 20% to a second-category organization such as a cemetery company. Short-term property: 50% and 30%. Deduction above the limit carries over for up to 5 years; anything still unused after that is lost.
- Bargain sale. The gift is the value minus the price received. The basis is divided in proportion to value, and the price minus the basis assigned to the sale is a taxable gain.
- Tax saved is the deduction used each year times the marginal rate entered, which assumes the donor itemizes at that rate every year.
- Compared with selling. Selling leaves the value minus capital gains tax on the appreciation. Giving leaves the tax saved, plus in a bargain sale the price received less tax on its gain. The difference is the cost of giving.
Worked example
The defaults describe a property held more than a year, bought for $100,000 and appraised at $300,000, given to a public charity by a donor with $400,000 of AGI, a 40% marginal rate and a 20% capital gains rate.
- Deduction: $300,000, limited to 30% of AGI, $120,000 a year. It is used as $120,000, $120,000 and $60,000 over three years.
- Tax saved: $300,000 × 40% = $120,000.
- Selling instead: $300,000 less 20% tax on the $200,000 gain leaves $260,000.
- Cost of giving: $260,000 − $120,000 = $140,000 less than selling. A bargain sale at the $100,000 basis gives a $200,000 deduction, saves $80,000, and realizes a $66,667 gain taxed $13,333, so it costs $93,333 less than selling.
How to read the result
The headline deduction is the total that can be claimed; the schedule shows when. The cost-of-giving figure is not a profit or loss on the property: it is how much less cash the donor ends with than by selling, after tax. A gift of appreciated property costs less than an equal gift of cash because the appreciation is never taxed, which is the difference this figure measures.
AGI moves the timing most. At $400,000 the deduction is used in three years; at $150,000 the limit is $45,000 a year, and after the year of the gift and five carryover years $30,000 is still unused and lost, so the tax saved falls to $108,000. The holding period moves the amount: held a year or less, the same property is deducted at its $100,000 basis.
Sources
- IRS Publication 526 (2025), Charitable Contributions — capital gain and ordinary income property, the 50%, 30% and 20% limits, bargain sales and the 5-year carryover.
- IRS, Instructions for Form 8283 (12/2025) — qualified appraisals and the donee acknowledgment.
- IRS Publication 544, Sales and Other Dispositions of Assets — the gain on the sale part of a bargain sale.
Sources checked October 2026.
Common mistakes
- Giving property held a year or less. It is deducted at basis, not value; at the defaults that is $100,000 instead of $300,000.
- Expecting the whole deduction in one year. The AGI limit spreads it out, and a deduction too large for six years of the limit is partly lost.
- Treating a bargain sale as tax-free. Part of the basis goes with the gift, so the sale part produces a taxable gain even when the price equals the basis.
- Assuming every charity gets the 30% limit. Second-category organizations, including cemetery companies, are limited to 20% of AGI for capital gain property.
- Skipping the appraisal rules. A gift of real estate over $5,000 needs a qualified appraisal and Form 8283 Section B, or the deduction can be disallowed.
Frequently Asked Questions
How much of a real estate donation can be deducted in one year?
For long-term capital gain property given to a public charity, the deduction is limited to 30% of AGI in the year of the gift; given to a second-category organization such as a cemetery company, 20%. Property held a year or less is ordinary income property, limited to 50% or 30% of AGI. Whatever is left carries over for up to 5 years.
Is real estate deducted at its full value?
If it was held more than a year, generally yes: IRS Publication 526 allows long-term capital gain property at its fair market value, so the appreciation is never taxed. If it was held a year or less, the deduction is reduced by the gain that would have been short-term, which generally limits it to the donor's basis.
How is a bargain sale to a charity taxed?
It is part sale and part gift. The gift is the property's value minus the price received. The basis is split in proportion to value, so part of the basis goes with the sale and the rest of the sale price is a taxable gain. At the defaults, selling at $100,000 a property worth $300,000 with a $100,000 basis is a $200,000 gift and a $66,667 gain.
What paperwork does a gift of real estate need?
A noncash gift over $5,000 needs a qualified appraisal, signed and dated no earlier than 60 days before the contribution, and Form 8283 Section B with the organization's acknowledgment in Part V, according to the Form 8283 instructions.