Real Estate
Three Ways to Give Real Estate

It's advantageous to give real estate that has appreciated in value because you receive a tax deduction for the current value of the property and you can avoid the capital gains tax on the appreciation of your property. To qualify for this double tax benefit, you must have owned the property for more than one year.

1. Make an outright gift of your property to Coeur d'Alene Homes. In exchange, you can make an important gift to benefit Coeur d'Alene Homes, deduct the appraised value of the property on your income tax return and avoid capital gains tax.

EXAMPLE: Jane purchased a property as an investment over twenty years ago. At that time, it was worth $50,000. It is now valued at over $200,000. If she sold it herself, she would have a taxable capital gain of $150,000 ($200,000 minus $50,000). At a federal tax rate of 15%, she would have to pay $22,500 in capital gains taxes (15% of $150,000).

IF JANE SELLS IT
Sales Price $200,000
Other Sales Expenses (15,000)
Capital Gains Taxes (22,500)
Cash to Jane $162,500

Conversely, if Jane donated the property to Coeur d'Alene Homes, she would receive an income tax deduction based on the appraised value of the property. In a 25% tax bracket, that would save Jane $50,000 in taxes. If Jane cannot use the entire deduction in one year, she can carry it forward for an additional five years. She also avoids paying $22,500 in capital gains tax. In total, the tax savings to Jane is $72,500. Jane also has the ability to restrict her gift for a specific purpose, or to endow her gift, so it lives on forever.

2. Establish a charitable remainder trust and receive an income for life in exchange. This is a great option if you do not want to own the property anymore, but you want to retain some income for yourself.

The benefits of a charitable remainder trust are:
• No longer have to manage and maintain the property
• Annual income for life or number of years
• Avoidance of capital gains tax on appreciated property
• Income tax deduction
• Potential reduction of estate tax
• Significant gift to Coeur d'Alene Homes

3. Give a future interest in your property, but retain the right to live there for the rest of your life. If you are 75 years of age or older, consider this gift planning opportunity. By establishing a life estate agreement with Coeur d'Alene Homes, you maintain the right to live in, maintain and otherwise use the property as you see fit while you are alive.

The future interest in your home is transferred to Coeur d'Alene Homes so that at your death, the property is owned by Coeur d'Alene Homes. As a result, you are able to take an income tax deduction for a portion of the value of your home while you are alive. You can benefit now from your ultimate gift.