Gifts to charitable organizations can be either outright (given immediately) or deferred (stipulated to be given sometime in the future). All have various tax benefits, depending on the type of asset that is donated. Here are some examples:
Gifts of cash and by check are the most popular methods of giving. Such gifts are convenient and may be tax deductible up to 50% of your adjusted gross income (AGI).
Charitable gifts may also be funded with assets such as stocks, bonds and mutual funds that have increased in value. You not only receive regular tax savings, but you entirely avoid the capital gains tax on qualified assets given for charitable use. This extra tax benefit is one reason why a growing number of people choose to make gifts using property other than cash.
Real property (like your house or land) that has been held long-term makes an excellent charitable contribution and promises you several advantages. 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. You avoid capital gains tax on the property's appreciation. The transfer isn't subject to the gift tax, and it reduces your taxable estate.
You avoid the unpleasant hassle of selling the property and the gift frees the cash that otherwise would have been used to pay for taxes and upkeep. If you would like the estate planning benefits but would also like to continue living there, you can give us your home but enjoy its use for your life-time by setting up a retained life estate.