A few years ago, brothers Jen-King Jao ’71, SM ’71, PhD ’75 and Zen-Kay Jao SM ’71 found themselves faced with the question of whether to sell their father’s house. They ultimately decided to turn it into a gift of real estate through a charitable remainder trust at MIT. “The gift was a way for us to express our gratitude for the superb learning experience we received at MIT,” says Zen-Kay. Jen-King agrees: “It was a win-win situation, especially from a money management point of view. We benefit from the charitable remainder trust income, and, at the same time, the gift benefits MIT.”

Making a gift of real estate allows you to support MIT while avoiding capital gains tax on the sale of the property and—depending on the type of gift—can provide you or your loved ones with an income stream for life. There are many facets to making a gift of real estate, but the MIT Office of Gift Planning (OGP) will work extensively with you and your advisors to ensure that the gift reflects your values and supports the areas at MIT that are important to you.

What follows is a general overview of how to make a gift of real estate to MIT, focused on residential properties—although most other types of real estate will follow a similar process. Consider this list a starting point. For more detailed information, contact the gift planning team in OGP.

How to Initiate a Gift of Real Estate

Step 1: Identify the property.
MIT will consider residential properties, vacation homes, rental and commercial properties, and undeveloped land, among other types of real estate.

Step 2: Consult your financial and legal advisors.
Though OGP works closely with you to navigate the gift process, we are restricted from giving financial and legal advice. When first considering a gift of real estate, you should contact your financial and legal advisors to see if a gift of this nature is best for your financial and tax situation.

Step 3: Contact OGP if you have not already done so.
During your initial conversations with OGP, we will want to learn more about the property, including its location, size, purchase date, and condition, as well as whether there is a mortgage or other liabilities. We will also discuss various methods for making a gift of real estate to learn what is best suited to your goals.

Step 4: Complete the real estate questionnaire and an independent property appraisal.
After the initial conversation, MIT will request that you fill out a questionnaire and provide pertinent documents to begin the gift review process. You are also required to obtain an independent, qualified appraisal of the property for tax purposes. The appraisal will help determine the fair market value of the property at the time of the gift, which is the amount that will be used when recording the gift at MIT.

Step 5: MIT conducts due diligence and finalizes the gift.
The due diligence process for gifts of real estate typically takes four to six weeks after the questionnaire and other pertinent documents are received by MIT. In some cases, it can take longer if additional information is required. Once MIT has completed the due diligence process and if MIT’s Office of the Executive Vice President and Treasurer has approved the gift of real estate, we will work with you and your advisors to finalize the documents necessary to complete the type of gift that you wish to make.

In all situations, OGP works closely with donors to communicate the status of the gift and answer any questions that may arise, working to ensure that the gift reflects your philanthropic values and supports your financial goals.