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, 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.
Eileen: "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 a taxable
capital gain because when I'm gone the trust
goes to charity. The trust takes 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 estate taxes."
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.
Gifts of real estate 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 Self Regional
Healthcare , please contact
us to discuss its suitability.
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 unique circumstances.
Return to Wills and
Bequests story.
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. All material is copyrighted and is for
viewing purposes only. Use of this site signifies your agreement
with the terms of use. The content
in this Planned Giving section has been developed for Self Regional
Healthcare by Future Focus.
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Revised:
July 10, 2008 15:54
.