Real Estate—Retained Life Estate

You may give the property to AAT while retaining the right to occupy the residence or operate the farm. Such a gift of a remainder interest provides a charitable income-tax deduction for the present value of the remainder interest that frees up tax dollars into spendable income—without causing any disruption in your lifestyle. In addition, this plan permits you to escape any potential capital-gain tax on the built-in appreciation.

Example: Amy, 75 and recently widowed, has lived in her home for 25 years and has no plans to move. To obtain present tax relief without altering her lifestyle, she gives her home to AAT while retaining the right to live in the home for life.

At the time of the gift, the residence is appraised at $250,000. This gift arrangement will provide a charitable income-tax deduction of more than $123,214 (the value of the charity's remainder interest). Since Amy's tax bracket is 24%, her total tax savings will be about $29,571 (24% of $123,214). This is the amount by which her income tax will be reduced over the period she reports the deduction.

In the event she decides to move, she will have several options: rent the property, give her life interest in the home to AAT in exchange for a stream of payments for life, or simply give her life interest outright and receive another deduction.

More Information

Contact Us

Gabriel Mosse
Director of Institutional Advancement
253.683.3941
gabriel.mosse@aat.org

 

America's Automotive Trust
2702 East D Street
Tacoma, WA 98421

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Ensuring America's Automotive History is Preserved

1965 Lotus F2There are many factors that show America's automotive history is at risk:

  • Our education system emphasizes college-prep and focuses less on the applied arts, crafts and trades. Meaning less young adults are entering the workforce in the areas of restoration and preservation of vintage vehicles, including motorcycles, boats and planes.
  • Car services are becoming more popular and are competing with traditional car ownership.
  • Technological advances have made modern cars more reliable and longer lasting – reducing the need for local repair shops. Hyper-sophisticated safety and environmental requirements make it difficult for a local mechanic to maintain or repair vehicles.
  • Government sponsored museums are dedicated to art, technology, history, air and space, but there is no Smithsonian for the automobile. Many traditional car museums have a limited purpose beyond showcasing the collections of its founders. They're often static in nature, have limited cultural reference and unfortunately, often collapse with the death of their founders with collections sold and dispersed.
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