b'CASE STUDYDONATIONS OF REAL ESTATEMEXICOMaking a charitable donation of real estate is a convenientWhen CAF America Is Liquidating the Property Creating a New way to avoid realizing capital gains on appreciated property.Often, donors want to make gifts of real estate located either However, donors looking to make these kinds of contributionsin the U.S. or overseas, and then advise that we sell it and useCampus in Mexicomust be mindful of the following considerations whenthe proceeds for charitable purposes. In this situation, the working with CAF America, depending on the intended advicefollowing considerations apply: Backgroundfor our treatment of the donation: A donor wished to donate real estate valued at more than $9 The property must be readily marketable. We will notmillion to a local university in Mexico, while still receiving tax accept donations of property that we cannot reasonablybenefits in the U.S. The university intended to use the donation When CAF America Is Granting the Property find a buyer for. as part of a campus expansion project to set up residences for Many donors want to gift their property to a foreign charity,We strive to avoid situations that could be considered avisiting fellows and other scholars.and CAF Americas complex asset program is a fitting way topre-arranged sale. The donor will be required to confirm support those wishes while providing full deductibility. Whenthat they have not made any arrangements (written orChallengewe are advised to grant property, we consider the following: otherwise) with the eventual buyer. While we seek buyersThere were multiple layers of ownership: the property was The grantee must pass an Equivalency Determinationfor the property before the donation is made, this search isowned by a Mexican trust, which was in turn owned by a review conducted by CAF America before we accept thedone in CAF Americas name and we do not represent theU.S. trust. For the donors to receive U.S. tax benefits for this donation. This means that we must be able to make a gooddonor whatsoever. contribution, the property needed to be accepted by a U.S. faith determination that the grantee would otherwiseWhile donors may want to see a certain liquidated value501(c)(3) with the ability to then make the gift to the Mexican be considered a public charity in the United States, andfrom the sale of their donated real estate, we cannotuniversity. involves an intensive review of governing documents,guarantee a specific dollar amount to charity. The donors financial statements, and other core information provideddeduction is determined by the appraised value of theSolutionby the grantee. property at the time of donation. Once an impartial third party completed a qualified appraisal, Not only must we comply with U.S. rules and regulationsCAF America provided advisory support and conducted due around granting to non-U.S. entities, but we must followdiligence to ensure that the gift to the university would comply laws in the grantees country that govern gifts from foreignwith U.S. regulations governing cross-border giving. After entities. This has the potential to complicate timelines andextensive work by CAF America staff, including in-person site can lead to extensive legal reviews. visits, our Board of Directors approved the transaction. The donor was able to claim U.S. tax benefits, while the university received a substantial addition to a new campus.Read more complex assets giving stories:cafamerica.org/news-insights/6 CHARITIES AID FOUNDATION AMERICA | DONATIONS OF COMPLEX ASSETS 7'