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Jonathan purchased a home many years ago for $80,000. The home has appreciated substantially over the years and is now worth $420,000. Jonathan's wife of 45 years recently passed away. Jonathan has decided to sell the home and move in with his son and daughter-in-law so that he can spend more time with the grandchildren. However, he recognizes that even after using his $250,000 home exclusion, he will still face high capital gain tax from the sale of the property. Jonathan's children had all attended Valley Christian Schools and he wanted to find a way to sell the home, avoid tax and make a gift to them.Jonathan: The home has turned out to be a good investment, but now that my wife is gone, I would like to spend more time with my family. I recognize that if I sold my home I would pay high capital gain tax. I'm looking for a way to reduce the tax on the sale of my home and obtain a little more income for retirement. I don't need a lot to live on, but I do like to spoil the grandchildren. I also like the idea of fixed income that won't fluctuate with changes in the market.  Jonathan called Valley Christian Schools and discovered that he could transfer his home in exchange for a large fixed annuity payment, based upon his age. Because the home was extremely marketable, it could be sold quickly by the school, and Jonathan would avoid capital gain tax on the sale portion. His home exclusion could be used to offset the remaining capital gain on the income he received from the annuity contract.Jonathan: I decided to transfer my home to Valley Christian Schools in exchange for the gift annuity and was delighted with the results. I avoided tax on the sale of my home and was able to receive a large monthly annuity payment for my retirement. Best of all, because the payment was fixed, I did not have to worry about market fluctuations. Now, I can spend as much time with the grandchildren as I want! Please note: The name and image above is representative of a typical donor and may or may not be an actual donor to our organization. Since your IRA gift benefits under federal rules may be different from this person, you may want to contact us to discuss an IRA gift. Example bequest language - Please feel free to change the numbers or percentages as you desire. 1. Bequest of cash "I bequeath the sum of $10,000 to Valley Christian Schools of San Jose, CA." 2. Bequest of a percent of the estate "I devise and bequeath 20% of the remainder and residue of property owned at my death, whether real or personal, and wherever located to Valley Christian Schools, San Jose, CA." 3. Contingent Bequest "If my brother John Doe survives me, I devise and bequeath 20% of the remainder and residue of property owned at my death, whether real or personal, and wherever located to John Doe. If John Doe does not survive me, then I devise and bequeath 20% of my residuary estate, whether real or personal property and wherever located to Valley Christian Schools, San Jose, CA." You may print a Bequest tri-fold brochure. What Legacy Will You Leave. |
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