SIDNEY AND ELISABETH GARVAIS had a lifetime of memories tied up in their second home, a small cottage on 4 ½ acres on Block Island, R.I. They paid around $20,000 for it in 1965, and used it for summer vacations and to entertain guests on weekends. Of course, it also turned out to be one of their best investments.
But when it came time to move on about three years ago — “the upkeep became too much; there was always brush to clear, stone walls to rebuild,” Mr. Garvais explained — there was no one to pass the property along to. (Simply cashing out would mean a sizable capital-gains tax.)
With no children and only one niece and one nephew, neither of whom cared to own the place, the Garvaises decided to give it to a charitable foundation. But the couple, both in their 80s and living in a senior community in Bloomfield, Conn., didn’t leave empty-handed. In return for turning over the property, which sold for $1.1 million, they receive monthly income and significant tax savings. At the same time, they remain content in knowing that their donation will help certain causes like health care reform.
From town houses to warehouses, just about any type of real estate asset can be donated to a qualified charitable organization, and estate planners say the gifts can be structured to provide tax benefits as well as income.
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