| You (and spouse or co-owner if appropriate) will sign a deed to The Minneapolis Foundation giving it title to the home, subject to a “life estate.”
You reserve the right to live in the home as long as you live; paying all the expenses of keeping up the home (real estate taxes, utilities, and maintenance etc).
You receive a charitable income tax deduction for the present value of the future gift to The Minneapolis Foundation (based on IRS actuarial calculations).
At your death (or at the death of the last to die of co-owners), the home becomes the property of The Minneapolis Foundation. Once it is sold, the proceeds of the sale establish or add to a fund that the donor created. This fund can be a:
- Donor Advised Fund (advised by children or others named)
- Field of Interest Fund
- Designated Beneficiary Fund
- unrestricted Community Action Fund
If you decide to leave the home while you are still living, the house can be sold and the proceeds divided between you and The Minneapolis Foundation (in proportion to the respective interests, based on IRS actuarial calculations).
Your basis in the home is apportioned between the life estate and the Foundation’s remainder interest, and you recognize gain only for the difference between the sale proceeds and the basis apportioned to the interest. In many cases, this will be covered by the IRS exclusion for sale of the home.
You could also give up your life estate, giving the entire home to your fund at the Foundation. When it is sold, all proceeds then go into the fund. The relinquishment of a life estate generates an additional charitable income tax deduction.
The acceptance of a gift of real estate is complicated. The Minneapolis Foundation is equipped to evaluate and accept such gifts so that you can ultimately benefit the charitable interests most important to you.
In order to evaluate a potential gift of real estate, the Foundation will work with you to learn the specifics of a particular property, including such things as fair market value, marketability, possible environmental issues and related questions.
The Minneapolis Foundation can provide written guidelines to assist in compiling the necessary information. Please be sure to talk to us before making the gift so that we can investigate all of the many factors that may affect acceptance of real estate gifts. |