Part of the appreciation in the real estate is not subject to capital gains tax, and the portion of the capital gain that is taxable to you is spread out over your life expectancy. Part of the annuity may also be tax-exempt.

Charitable Remainder Trust: A donor gives real estate to a trust, and receives an annuity payment periodically from the trust for the lifetime of one or more donors, or for a period of years, or a combination. The payment may be fixed (charitable remainder annuity trust or "CRAT") or may fluctuate with the value of the trust (charitable remainder unitrust or "CRUT"). In either case, the capital gain on the sale of the real estate will be spread out over many years. Usually with real estate gifts, the trust will be structured as a "Flip CRUT" (one that begins making annuity payments after the occurrence of a specific event, such as the sale of the real estate) or a "NIMCRUT" or "NICRUT" (one that pays out only net income, and doesn't have to begin making payments until it actually earns income, such as following the sale of real estate). When the real estate is sold, proceeds go into the trust and are invested, and the trustee begins making annuity payments. At the end of the term of the trust, the remaining assets go into your endowed fund at The Minneapolis Foundation. This fund can be a donor-advised fund (advised by children or others you name), a field of interest fund, a designated beneficiary fund, or an unrestricted community action fund.

In order to evaluate a potential gift of real estate, the Foundation will work with you to learn the specifics of your particular property, including such things as fair market value, marketability, possible environmental issues and related questions. If a charitable gift of real estate interests you, The Minneapolis Foundation can provide you with written guidelines to assist you in compiling the necessary information, and illustrations of how a charitable remainder trust or charitable gift annuity might work for you.