Shelter Plus Tax Shelter

[swsop]

Hellow All,

Here's a little light reading

If you own a valuable home in a desirable neighborhood, you may
want to donate that house to charity yet continue to live in the
house. To do so, you'd contribute a "retained life estate" to
your favored cause.

With this strategy, you'd sign over the deed to the house while
keeping the right to live there, for yourself and perhaps your
spouse. Not only do you retain the right to live there, you retain
the responsibility for maintaining the house and paying the bills
related to home ownership.

At your death (or the death of your spouse), the charity can sell
the house and keep the sale proceeds. Even though such a payoff
might be far in the future, you can claim a charitable tax
deduction right away. In essence, the present value of the future
donation will be calculated and you get to deduct that value in
the year of the agreement. Tax code restrictions might limit your
first-year deduction but any unused deductions may be taken over
the next five years.

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