Gift Planning Strategies for Gift Annuities and Real Estate
There are several ways for you to make a gift of your real estate to us that may provide you with benefits beyond the gift annuity payments.
Bargain Sale
You sell your property to us for less than its appraised fair market value. We will issue a charitable gift annuity to you based on the difference between the sale price and the property value. You may be able to avoid your essential capital gains tax on the sale with the combination of the income tax deduction from your gift and the tax-free use of the home exclusion altogether.
Life Estate Reserved
You can make a gift of your residence to us while retaining the right to live in your home for the rest of your life. This technique is called a life estate reserved, and it is possible to combine this option with a gift annuity.
Other Planning Considerations
Appraisal. Gifts of real estate require a qualified appraisal to determine the property’s value.
When creating a life estate, the person who retains the right to live in the home will sign a Maintenance, Insurance, and Taxes (MIT) agreement. This affirms the understanding that they will maintain the property in its current condition, carry appropriate property insurance, and pay any real property taxes. • Maintenance, Insurance, and Taxes Agreement.
Home Capital Gains Exclusion. If you have lived in your home as your primary residence for the last two years, you may be able to exclude up to $250,000 in capital gains on the sale of your home if you are single and up to $500,000 if you are married.
What Can Types of Real Estate Be Used with a Gift Annuity?
- A personal residence or vacation home
- Rental or commercial property or any other investment property
- Undeveloped land, farm, and agricultural land or ranch land
Is a Gift Annuity for Real Estate Right for You?
If you own appreciated real estate and would like to make a significant gift supporting our work and mission, you may want to consider a charitable gift annuity.