Gifting Real Estate
This method—called a bequest—allows you the flexibility to change your mind at any time since your gift isn't actually complete until after your lifetime. Plus, if your estate will be subject to estate taxes, this gift entitles your estate to a federal estate tax charitable deduction for the full value of the property, reducing any estate taxes owed upon death.
How You Benefit
In addition to freeing your loved ones from the costs and responsibilities of ownership, leaving the MVCMA your real estate after your lifetime offers these benefits:
Simplicity - Just a few sentences in your will or trust are all that is needed to complete your gift.
Flexibility - Because you are not actually making a gift until after your lifetime, you can change your mind at any time.
Tax relief - The gift entitles your estate to a charitable estate tax deduction, reducing the amount of federal estate taxes your estate may owe the IRS.
Beyond an outright gift - Other ways to give Real Estate
Many people can't imagine living anywhere else but their current home (or their island cottage). Many would also love to make a major gift to the MVCMA but don't have the means to make such a gift today. If this sounds like you, you may want to consider a charitable giving arrangement called a retained life estate.
With a retained life estate, you deed a personal residence to the MVCMA now. You retain the right to occupy the home for life and continue to pay real estate taxes, maintenance fees and insurance on the property. In addition, you can later decide to rent your home or make improvements to it. After your lifetime—and the lifetime of your spouse or another person you choose to retain rights to live in the home — MVCMA is given possession of the property.
With a retained life estate, you can benefit in these ways:
You get the satisfaction of using your home to make a significant gift to MVCMA while retaining the right to live there for life.
You qualify for a sizable income tax deduction in the year the gift is made. The amount of your tax deduction is based, in part, on your age and the value of the property.
You can immediately deduct the amount of your gift up to 30 percent of your adjusted gross income and carry over any unused deduction for up to five additional years.
The gift isn't subject to capital gains tax.
The property gift eliminates federal estate tax as long as the life estate was created for you and/or your spouse.
If at any point you no longer wish to occupy the property, you can rent it to provide an additional source of income (within the rental rule guidelines if it is an MVCMA cottage). Or, you can give MVCMA the right to use the property for the rest of your life. This will provide you with yet another tax deduction.
Read about the other ways to defer a donation here.