The Gift Process

The process for making a gift of property starts with a complete description of the item(s), and, in the case of a work of art, a photograph. Once the Medical School receives this information, the appropriate parties will evaluate the artistic, historical, or educational value of the proposed gift as it relates to the Medical School's mission. If the gift is accepted, in most cases you will be entitled to a charitable income tax deduction equal to the object's fair market value, provided that the item is directly related to the Medical School's tax-exempt educational and research mission.

A special rule applies when you give works of your own creation. Your deduction is limited to the cost basis. The same rule applies to gifts of letters, memoranda and other property prepared or produced for the donor (e.g. letters written to the donor).

The Appraisal

To receive a charitable deduction for a gift of property, you must obtain an appraisal if the property is valued at more than $5,000. The appraisal must be done by someone who is independent of Harvard Medical School and you. The appraiser should be professionally qualified to assess the fair market value of that particular type of property you wish to donate. The appraisal must be completed not earlier than 60 days prior to the date of gift and not later than the day before the due date of your income tax return. The costs of obtaining the appraisal, transportation and insurance until delivery are customarily considered part of the gift-making process and are assumed by the donor. The appraisal cost may be reported as a miscellaneous itemized deduction on our federal income tax return, subject to the conditions applicable to such deductions.

Gifts to a Harvard Managed Trust

Another advantageous gift arrangement is to transfer the property to a Harvard-managed trust. Harvard then would sell the property and reinvest the proceeds to pay you and/or another beneficiary income for life or for a term of years. Generally, when funding a trust with tangible property, there is no income tax deduction available. However, there are many other benefits:

• Conversion of non-income producing property into an income producing gift with no capital gain tax
• Portfolio diversification and professional management through Harvard Management Company at no cost
• Removal of the property from your estate
• Ability to designate the use of the future gift proceeds at Harvard Medical School

For More Information

Ms. Mary Moran Perry
Director of Gift Planning
Harvard Medical School
401 Park Drive
Boston, MA 02215
(800) 922-1782 or (617) 384-8449
Fax: (617) 384-8488
mperry@hms.harvard.edu