Donating Your Home

We've all heard the expression, "You can't have your cake and eat it, too." Well, that may be true of most things in life, but not one's house. Do you know it's possible for you to donate your house to the University of South Alabama, receive a charitable contribution deduction on Form 1040 for part of the house's value, and still live in the house the rest of your life?

how it works

First

Call the USA Office of University Development (251) 460-7032 and tell them you want to donate your home but continue to live there for the rest of your life. We will work with your attorney to prepare the necessary paperwork.

Second

Only three items are needed to help us complete the donation:

a deed that gives USA ownership of the house at your death or the later death of your spouse if you are married (this is called the remainder interest ), but reserves for you, and your spouse, the right to live in the house for life (this is called the life interest )
an appraisal showing values for both land and house for the purpose of substantiating the charitable deduction
assurance of a clear title (an environmental review might be necessary)

Third

With everything in order, acceptance of the gift will be recommended to the USA Board of Trustees. Upon acceptance, the deed is recorded and the gift is completed.

Please remember you are responsible for maintenance, property taxes and mortgage payments while you live in the house.

Farms and vacation homes may also be given to USA in this fashion

When the time comes to prepare your income tax return for the year of the gift, your accountant or tax advisor will be able to calculate the value of the remainder interest, deduct it on your return as a charitable contribution, and advise you on filing a gift tax return.

THAT'S ALL THERE IS TO IT! 3 EASY STEPS! HAVE YOUR CAKE AND EAT IT,TOO!

In summary, you continue to use the property the rest of your life, you get an up front income tax deduction, and USA gets the property when you don't need it anymore!

This material is provided solely for educational purposes and is not meant to be an exhaustive explanation of the item covered. This is not intended as professional advice, accounting, legal, or otherwise, by the University of South Alabama or its employees. Further, there may be items or issues relative to the subject matter that are not covered here but should be studied depending on individual situations. Also, because laws are subject to change at any time, current authoritative resources should be consulted before steps are taken to implement any ideas presented in this material. Readers are encouraged to seek the services of a professional familiar with their financial needs.