A donor who gives us appreciated real estate can completely avoid capital gains tax on the appreciation and qualify for a charitable income tax deduction for the full fair market value of the property.
A special provision of the tax law allows an immediate income tax charitable deduction for a gift of a remainder interest in your home or farm. With a remainder interest gift, you retain an absolute right to occupy the home or farm for your life (or the life of a family member). The property passes to us only after termination of the life estate(s).
The charitable deduction allowable for this future gift is the present value of our right to receive the property at some later date. The age of the life tenant is the primary factor in determining the present value of our deferred interest and the charitable deduction. The gift is deductible in the year of the transfer (subject to certain income limitations and assuming the donor itemizes).
Federal tax laws let donors take a charitable deduction for gifts of fractional interests in real estate. This type of gift can be especially rewarding when you own a vacation home that you use only part of the year.
Example: Mary and Jim own a $300,000 vacation home that they use for only two months of the year. They can give our institution a 50% interest in the property, qualify for a tax deduction for the value of our interest in the property, and still have a right to use and occupy the property for up to half the year.
Contact us for more information about gifts of real estate.
Making a planned gift—whether by including a bequest to the Museum in your will or by naming CHM as the beneficiary of a charitable remainder trust, life insurance policy, or retirement fund—provides essential support for the Museum’s future. Planned gifts can offer significant tax advantages and in some cases generate lifetime income for you or your chosen beneficiary.
Learn more about Estate and Gift Planning at CHM.
For a deeper look into various estate gift topics, explore our Planned Giving Resources Library.
For more information on how these gifts might work for you, contact us to learn more about Estate and Gift Planning.