Appreciated Real Estate & Charitable Remainder Trust
The early church was uncommon. It possessed attributes unlike any other community or organization known in their time. Their unity and value system was uncommon because they shared an uncommon story about how the risen Lord brings life change. As a result, they enjoyed the uncommon grace of God. As the story of the early church evolves, we find an amazing marker of this emerging movement: they had an uncommon sense of generosity.
“There were no needy people among them, because those who owned land or houses would sell them and bring the money to the apostles to give to those in need. For instance, there was Joseph, the one the apostles nicknamed Barnabas (which means ‘Son of Encouragement’). He was from the tribe of Levi and came from the island of Cyprus. He sold a field he owned and brought the money to the apostles” (Acts 4:34-37, NLT).
We are somewhat caught off guard to read the claim that the church was so generous that it had eliminated all economic need within their group. Because they valued one another over their material possessions, they gave generously, even if it meant parting with a house or a field. I think it’s important to note that they gave with no strings attached. They sold stuff and gave the proceeds to the apostles and allowed them to distribute the funds according to their own discretion. Amazing!
When you think about it, the people of God throughout history have been known for their generosity. Think about your community. What are the names of your local hospitals? In most cities the hospitals are foundationally linked with the Church. Think about the colleges and universities in America. Many of those private schools were started by the people of God who held a conviction that education was a priority. Think about the orphanages or the agencies that work tirelessly to serve those in need. Again, the people of God were on the cutting edge of meeting human needs and solving real problems in society. Uncommon!
By way of example, Acts describes the generosity of a man whose given name was Joseph. He was a Levite, a leader of worship if you will. His life and his actions were so encouraging that the apostles gave him a nickname: “son of encouragement,” or Barnabas. His personal impact would continue to be interwoven in the story of the early church.
Barnabas was a “big picture person.” According to Acts 4:36-37, he sold a piece of property and gave the proceeds of the sale to the apostles so they could feed the poor. No wonder the apostles gave him a nickname! Encouragers are not afraid to roll up their sleeves and get their hands dirty. They deal with the real stuff of life experience. They are quite comfortable working in the context of the bigger picture. He not only helped with an immediate need, he encouraged others with his “buy in.”
Richard and Kathy Bates, age 70 and 69, respectively, want to retire and spend more time traveling. To meet these goals, they decide to sell an apartment building they purchased 20 years ago for $2,000,000, which was recently appraised for $6,000,000. After claiming $750,000 of depreciation, their current basis is $1,250,000. They are concerned about the effect of capital gain tax on the remaining $4,750,000, which they think would leave them with only $5,107,000 to invest toward their retirement and travel goals.
Unfortunately, the Bates' CPA explains that depreciated real property is subject to a higher capital gain tax rate (25%) for the portion of the capital gain attributable to depreciation. If they sell the property, the Bates will pay a higher capital gain tax on a portion of the property. This extra capital gain tax is an extra $47,000, which means they would only have $5,060,000 to invest toward their retirement and travel goals.
On their financial planner's advice, Richard and Kathy create a 6% charitable remainder trust (CRT) to sell the apartment building to avoid paying capital gain tax, pay them a lifetime cash flow, gain an immediate income tax charitable deduction and leave a significant gift to their church at their death.
Encouragers are active supporters. Barnabas didn’t open his mouth, he opened his wallet. Why? Because he saw the big picture. He understood the immediate need at hand, but also the correlation between the immediate need and the long term goal.
Generosity not only meets physical needs, it also meets a spiritual need that we all have--the need for encouragement. Barnabas was strategically introduced to the story of the early church in this context, and his personal generosity was associated with encouragement. In other words, your generosity serves to encourage others and validates the claims of our faith and the calling of our Lord.
You have an opportunity to be an encouragement to those you worship with each week. Through your example of generosity, your gift not only makes an impact toward achieving the mission, vision and values of your church, you also serve to encourage others to do the same, thus multiplying your investment in the Kingdom of God.
Your church is committed to come alongside you in order to serve you as you consider investing in things that are eternally significant. A thousand years from now only one thing will matter. What would it be like for you to enjoy heaven knowing that your transformative gift made it possible for others to join you there?
