REAL ESTATE
Read the
WARNING! first.
Vacant land, homes,
commercial buildings or other forms of real estate are often used to make
a charitable donation. There are several ways to donate real estate, some
involving tax deductions and others not providing a tax deduction. You can
make an outright gift of undeveloped land, a commercial building, a farm,
a vacation home, or your residence, if you have owned the property for a
year or more. You can make a gift and receive a tax deduction for the
present market value. There are some conditions in the tax law which may
affect each case differently; therefore, a competent attorney should be
consulted.
One way to make a gift of
real estate is to donate the "remainder interest" in your home. Most
likely, you want to keep using your home during your lifetime. By deeding
the property now and retaining the right of life occupancy, called a "life
estate," you can have the satisfaction of making a sizeable tax deductible
gift during your lifetime without disturbing your current lifestyle. The
advantages of donating the remainder interest in your home, or other real
estate, are:
If you donate your home,
you will continue to pay taxes, insurance and maintenance costs, but you
will receive a substantial charitable tax deduction and the opportunity to
live in your home for the rest of your life.
Here is an example: You and
your spouse own a house which you want to give to a college and you want
to continue to use it for the rest of your life. The home is valued at
$75,000. If you and your spouse are ages 65 and 60, you will be able to
take an income tax deduction of $15,000 and then reinvest the tax savings
to provide more income. You will be able to use and maintain the home as
you have always done, knowing they have made a very special gift.
Back
to Planned Giving
For assistance with a making
a donation of real estate, contact us. |
