A gift of real estate can also be tax-wise. A residence, vacation home, farm, acreage, or vacant lot may have so appreciated in value through the years that its sale would mean a sizeable capital gains tax. By making a gift of this property instead, you would avoid the capital gains tax, and, at the same time, receive a charitable deduction for the full fair market value of the property.
It is also possible to make a gift of your home, farm, or vacation home so that you and your spouse can continue to use it for your lifetimes––while you receive a current income tax deduction.
Example: Mr. and Mrs. Smith own a vacation home in the mountains that they would like to continue using. Its fair market value is $100,000. By contributing the home to us now, but retaining the exclusive right to use it for the rest of their lifetimes, the Smiths are able to achieve a current income tax charitable contribution deduction of approximately $25,000. (The precise amount will depend upon their ages, the useful life of the house, and other factors.)
This information is necessarily general in nature; you should contact your own attorney, accountant, or other qualified financial and estate planning professional regarding how it relates to your specific situation. We would be pleased to provide you with additional information – at no obligation – on how planned giving can be of benefit in your overall financial or estate plan.