In the high-appreciation markets of New Hanover and Brunswick counties, many long-term property owners face a "good problem": substantial equity. Whether you bought a vacation rental on Wrightsville Beach in the 90s or a portfolio of single-family homes in Hampstead ten years ago, the value has likely skyrocketed.

However, realizing that value usually comes with a hefty price tag: Capital Gains Tax and depreciation recapture. For investors looking to transition out of active management while making a significant charitable impact, the intersection of Real Estate and Donor-Advised Funds (DAFs) offers a powerful, underutilized strategy.

The Appreciation Dilemma in Coastal NC

The standard exit strategy—selling the property and donating the cash proceeds—is often inefficient.

If you sell an investment property in Southport or Surf City, the IRS takes a cut of the capital gains, and you may pay tax on the depreciation you claimed over the years. This significantly reduces the net amount available to you or the charity you wish to support.

Myth vs. Reality: Donating Complex Assets

Myth: You must sell the real estate first to fund a charitable account. Reality: You can donate the property interest directly into a Donor-Advised Fund before the sale occurs.

By contributing the asset itself (held for more than one year) to a DAF, you generally achieve two major financial victories:

• Eliminate Capital Gains: Because the charity (the DAF sponsor) sells the property, no capital gains tax is triggered on the sale.
• Fair Market Value Deduction: You may be eligible for an immediate income tax deduction based on the property’s current appraised fair market value, not just what you paid for it.

For a property in Wilmington’s historic district or a commercial parcel in Onslow County, the difference between cost basis and market value can be hundreds of thousands of dollars. The DAF captures that full value for philanthropic use.

Strategic Execution: The "Insider" Details

This strategy is not as simple as writing a check. It requires a partner who understands the specific liquidity nuances of our region.

• Marketability Matters: A DAF sponsor will want assurance that the property in Oak Island or Pender County is marketable and free of environmental liabilities.
• The Liquidation Phase: Once the asset is in the fund, it must be sold. This is where local real estate expertise becomes critical. The property needs to be priced and marketed correctly to maximize the charitable bucket without lingering on the market during the off-season.

Who Should Consider This?

This strategy is particularly effective for:

• Retiring Landlords: Investors in Jacksonville or Leland who are tired of property management but want to create a charitable legacy.
• Estate Planners: Families looking to reduce the taxable estate value while supporting local causes, from sea turtle conservation to housing initiatives.

Your Next Step

Using real estate to fund philanthropy requires a team approach involving your CPA, financial advisor, and a real estate partner who understands the asset's true potential. You need to know if your property is a viable candidate for this structure before you list it.

Aspyre Realty Group are experts in listening and communicating people's wants into homes and investments that work for them. We act as your strategic guide, helping you understand the market value of your assets so you can make decisions that maximize both your wealth and your impact. Let’s connect to evaluate if your portfolio is ready for a strategic transition