REAL ESTATE GIFTING

The Real Estate Gift
Changing tax laws and economic conditions of the times can offer special benefits for the donor and the recipient when giving property.

Increased Property Values
Most persons who have owned one or more homes soon realize that a sizable capital gains tax can result when the property is sold. This can especially be true with property other than residential property.

Gifts of real estate potentially allow for a double tax savings. First of all, you will receive an income tax deduction for the full value of the property. Also, there will be no capital gains tax because the property was given, not sold. Additionally, if the property has not been producing income but rather incurring expenses, your current income is not adversely affected.

Decreased Property Values
Giving property which has decreased in value may offer opportunities of a different nature.

Selling the property for less than the purchase price will give you a capital loss that you may be able to deduct from your income taxes. Giving the cash proceeds to the Hastings Catholic Schools will allow for a charitable deduction for that amount. The net result may be a deduction greater than the current value of the property.

Retaining Property Usage
It is possible to donate your home to the Hastings Catholic Schools and retain the use of it for life. A tax deduction results in the year of the gift, usually about 50% of the value. Additional tax deductions are available if the home is vacated at a later date.

Many persons find their children living in other areas and may be doing well financially. By retaining the rights of ownership for lifetime, one can maintain ownership yet take advantage of a substantial tax deduction while still living in the residence.

Income Possibilities
In addition to the examples mentioned above, other options are possible. Real Estate gifts can be made to result in income for any period of time chosen by the donor. Regardless, capital gains law is avoided and income tax deductions are allowed as determined by law.
The Hastings Catholic Schools Development Office has professional individuals available to help you in this process. They can provide you with the options available and assist you with the necessary documentation.

EXAMPLE:
Mrs. Catherine Skooling, 69, lives alone in her very modest two-bedroom home centrally located in the city of Hastings. This home is valued at $48,000 which has gradually increased in value over the 15 years from when it was purchased. Her moderate income is a result of savings and investments amounting to $125,000.00 plus her Social Security Income. Her two children live some distance away but generally maintain contact by weekly phone calls and an occasional visit. Catherine is pleased to provide them with a place to stay when they do visit.

Her family consists of her two children and her church. Each provide her with a loving relationship which she values dearly. lb these two entities she wishes to leave her estate.

Mrs. Skooling donates her home to the St. Cecilia High School Endowment Fund to further the needs of the children, teachers and staff of St. Cecilia. She maintains the right to use the home for as long as she desires. The result of this transaction is an immediate tax deduction of up to 50% of the value of the home. Additional deductions may be available when/and if she releases her right to use the home during her lifetime. In addition, she has more available cash because the deduction has reduced her income taxes.


Another factor that prompted her decision was that she no longer has to worry about burdening her children with the sale of the home while living a distance away. She is making maximum use out of the assets that she does have while contributing toward those people and organizations that mean the most to her.

Upon her death, the home ownership passes to the school and out of her personal estate. The children receive all remaining assets as she so dictated. The problems associated with the preparation and sale of the home have been eliminated. Taxes on the appreciated portion are non-existent. And the Endowment Fund has been substantially increased

	HASTINGS CATHOLIC SCHOOLS  DEVELOPMENT OFFICE 111 North Burlington Avenue Hastings, NE 68901 402-462-6566 Tax Identification Number: 36-3336517