Getting Started

Find out how you can make a gift to the El Dorado Community Foundation of a remainder interest in your home, receive sizable tax benefits now and continue living in your home for the rest of your life.

Many of our supporters can't imagine living anywhere else but their current homes. Many would also love to make a major gift to the El Dorado Community Foundation but don't have the means to make such a gift today. If this sounds like you, you may want to consider a charitable giving arrangement called a retained life estate.

How It Works

With a retained life estate, you deed a personal residence or farm to the El Dorado Community Foundation now. You retain the right to occupy the home for life and continue to pay real estate taxes, maintenance fees and insurance on the property. In addition, you can later decide to rent your home or make improvements to it. After your lifetime—and the lifetime of your spouse or another person you choose to retain rights to live in the home—we take possession of the property.

How You Benefit

• You get the satisfaction of using your home to make a significant gift to the El Dorado Community Foundation while retaining the right to live there for life.
• You qualify for a sizable income tax deduction in the year the gift is made. The amount of your tax deduction is based, in part, on your age and the value of the property.
• You can immediately deduct the amount of your gift up to 30 percent of your adjusted gross income and carry over any unused deduction for up to five additional years.
• The gift isn't subject to capital gains tax.
• The property avoids federal estate tax* as long as the life estate was created for you and/or your spouse.
• If at any point you no longer wish to occupy the property, you can rent it to provide you with an additional source of income. Or, you can give the El Dorado Community Foundation the right to use the property for the rest of your life. This will provide you with yet another tax deduction.

Example

Ellen, 78, a widow, deeds her home to a qualified charitable organization, though she plans to live there for the rest of her life. The fair market value of the property is $200,000 (the house: $160,000, and the land: $40,000). Based on Ellen's age and the value of her house, her accountant determines her income tax deduction to be more than $132,000.** After Ellen's lifetime, the organization takes possession of the property.

*Currently federal estate taxes are repealed for all deaths that occur in the calendar year 2010. In 2011, estate taxes are scheduled to be reinstated for estates worth more than $1 million at rates up to 55 percent. Congress, however, may address reinstating estate taxes sooner than 2011. What the final legislation will look like and when it might become effective is unknown at this point.

**Based on a 3.4 percent charitable midterm federal rate.