If you have been thinking about making a substantial gift to Simpson, perhaps you should consider real estate. A gift of cash or securities at this time may not be practical. Your personal residence, farm, vacation home, commercial property or parcel of undeveloped land might be more suitable.

A present or future gift of real estate offers you the opportunity for valuable income tax and estate tax savings. You can also free yourself of burdensome management and the problems involved in selling the property or leaving it to estate liquidation.

Whether the College keeps or sells the property, you will make a satisfying and enduring contribution to Simpson's work.

Choose the time of your gift
If convenient for you, you can make a gift of real estate now. Assuming you itemize deductions on your return, you will get a substantial income tax deduction, and you'll have the satisfaction of seeing the results of your generosity.

Perhaps an immediate gift isn't feasible. You may want to use the property a while longer or even retain lifetime use. In any case, you can still make the necessary arrangements now and benefit from a substantial current income tax deduction.

How to calculate your tax benefits
When you make an outright gift of real property, you obtain an income tax charitable deduction equal to the property's full fair market value (if held long-term) instead of the lower cost basis.

This deduction lets you reduce the cost of making the gift and frees cash that otherwise would have been used to pay for taxes and upkeep. Also, you avoid tax on the property's appreciation, the transfer isn't subject to the gift tax, and the gift reduces your taxable estate.

Your deduction for a gift of appreciated real estate in any year is generally limited to 30% of your adjusted gross income, with a five-year carryover of the unused deduction.

The retained life estate
You can give Simpson your home and receive a charitable deduction for it, even though you continue living there. This arrangement is called a "retained life estate."

Let's assume you want to continue using your personal residence for life. You may also want a survivor (perhaps your spouse) to enjoy life occupancy, but ultimately you'd like Simpson to get the property.

Obtain immediate tax savings
By deeding your home to the college now, subject to these rights, you can obtain a sizable income tax deduction this year. The amount depends on the value of the property and your age (and the age of any person given life use).

This same charitable deduction opportunity is also available for a farm, vacation home, condominium or stock in a cooperative housing corporation, if the property is used by you as a personal residence. A farm may include acreage with or without the house.

Give your home to a trust and get a life income
If you don't want to live in your unmortgaged home any longer, consider transferring it to a charitable remainder trust.

The trustee can then sell the property and invest the proceeds in income-producing securities. You will receive an income for life--and so can a survivor you name. The trust principal becomes Simpson's, without exposure to estate taxes when spouses are the only income beneficiaries.

When you transfer appreciated property held long-term, you won't pay any tax on the capital gain, and you will benefit from a substantial current income tax deduction.

Personal satisfaction added to tax benefits
When you give your home to Simpson, you create a tangible and enduring testimonial as evidence of your interest in the college's goals. Your personal satisfaction is complemented by important income and estate tax savings.

Two free booklets are available on the subject of giving real estate to Simpson College. Order here.