Gift Annuities in Real Estate

A Key West real estate  homeowner interested in converting home equity into income may want to consider a gift annuity in which the homeowner donates the home to a qualified charitable institution and is eligible for a tax deduction against taxable income in the year in which the donation is made. In return, the institution provides an annuity to the donor and grants the donor a life estate in the home. This means that the donor may remain in the home for his or her lifetime and is responsible for all taxes and maintenance on the home. At the donor's death, the real estate property becomes the possession of the charitable institution.

This arrangement offers several tax advantages, particularly for homeowners who do not have heirs or who want to reduce this size of their taxable estate. Again, a local key West financial professional or tax attorney should be consulted.