Whatever gift vehicle is chosen, the donor incurs no capital gains tax liability on the appreciated portion of the fair market value of the property, and enjoys a charitable tax deduction in the year the gift is made. Special Considerations A gift of real estate is a potential benefit to both donor and the University. Gift of Real Estate and Retained Life Estate A donor and spouse may decide to make a gift of their principal residence or vacation home to the University and retain the right to live in the house for their joint lifetimes. The donor receives a charitable tax deduction in the year of the gift and retains rights and duties of ownership for life. Other Other assets which can be transferred to the University to fund a charitable gift include, but are not limited to, life insurance, stock in closely held businesses, and tangible personal property.
Special considerations apply to each category.
In the instance of life insurance, the donor transfers ownership to the University and names the University as the primary beneficiary. If the policy is current, the donor makes annual contributions equal to the premium amount and is credited for a gift of cash to the University. The premium in turn is paid by Cumberland University. Stock in a closely held corporation can be used as a funding asset. The issues here are of establishing a fair market value of the stock.