Gifts of Real Estate
Eileen and her husband, Paul, enjoyed their house. They had raised
their three children there and had many family memories. But after
Paul passed away suddenly, Eileen began to find that the old house
was a burden. Without Paul to take care of things and with their children
involved in their own families miles away, it seemed that the house
was too big, too old and even a bit lonely.
"Paul always said that I was the solid one. If there was a
decision to be made I could get to the bottom line pretty quickly.
Well, the bottom line was that I needed to make a change for a number
of reasons. I decided to move into a smaller place in town, easier
to take care of and one that was part of a neighborhood where I could
make some new friends and be a part of activities and things. And
where my grandchildren could still come and visit."
"Paul and I had talked about what to do when we got to this stage
in our lives. I just thought Paul would be here with me, but that
wasn't to be. We had planned and knew I would have enough money to
live comfortably. Initially we thought I'd need the money from the
sale of the house, but I really don't."
"My advisor went over the numbers with me. If we sold it, there
would be a large capital gain and taxes to pay. But by putting the
house in a trust that then sells it, I avoided having to recognize
the taxable capital gain right away. The trust takes all the money
from the sale of the house and invests it, and I get the income from
the trust for life. Then, an organization that is doing great things
will receive the remainder of the trust and that will even save some
There are more than 65,000 at-risk youth in our community who could benefit from a mentor.
Depending on the circumstances that are involved, gifts of real estate
can be an effective means of planning a gift. Much of the individual
wealth in America is invested in real estate. While the first thought
often is a home or farm, real estate also can involve a vacation or
second home, an apartment or commercial building, a shopping center,
or undeveloped land.
Often our real estate holdings, be it our house, a second home or
investment property, are a significant part of our net worth. Gifts
of real estate, therefore, can enable us to make significant contributions.
Each piece of property and its unique circumstances need to be reviewed
to determine the suitability of the property as a gift. Generally
speaking, a rule of thumb is that an acceptable piece of property
is one that can be readily sold.
Also, there are many ways to donate property. It can be an outright
gift, a retained life estate, or placed
in a trust (such as what Eileen and her advisor set up). In any
case, while we discuss some generalities here about donating real
estate, if you are considering such a gift to Big Brothers Big Sisters
of Tampa Bay, please contact us to discuss
In addition to making a significant contribution, there can be other
benefits for you:
- There may be a charitable income tax deduction that would lower
your income tax.
- If your property has appreciated in value since you acquired
it, there might be a large capital gain tax that would result if
you sold it. By donating the property, you may be able to avoid
realizing the capital gains.
- Depending on your state regulations, you may be able to turn
the property into a gift that is structured to provide income for
you and a beneficiary.
- If the property is your home or farm, you may be able to make
a gift of it now and continue to live in it for the rest of your
life and receive tax benefits the year of the gift.
- If the contribution from your property exceeds the allowable
charitable deduction limits, the deduction may be carried forward
for five years.
There can be significant advantages to using property as a charitable
gift. Please contact us to discuss your
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Please note, individual financial
circumstances will vary. The information on this site does not
constitute legal or tax advice. Donor stories and photographs
are for purposes of illustration only. As with all tax and estate
planning, please consult your attorney or estate specialist.
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webmaster. Revised: July 22, 2008 22:05.