The Condo Mostly Stays Vacant Now

The condo mostly stays vacant now.

If that sounds like an all-too-familiar lament, you are not alone.

Mr. and Mrs. Goodman are charitably-minded people who have owned a waterfront condominium for a number of years. While this second home once was a busy place, the children and grandchildren rarely visit nowadays. Still, the Goodmans spend a couple of months there each year.

Working with their estate planner, the Goodmans learned that this condominium “problem” provided a unique opportunity for them. Here’s their example:

Over the years they have owned it, the property increased in value even as they paid off the mortgage. Because the children don’t want it, once the Goodmans are no longer able to visit the waterfront they want their favorite charity to somehow have the benefit from the condo. Their estate planner encouraged them to consider giving it now, while retaining the right to use it for as long as they wish.

The Goodman’s CPA confirmed that this not only is possible, but economically advantageous for them.

Here is why:

  • They can continue to use it as often and for as long as they want and have others visit too.
  • By giving the condo, there will be no need to deal with the sale of it when the time comes, and capital gains tax is avoided because the condo is not subject to debt.
  • Retaining their “life estate” while deeding the house to their favorite charity now will create a significant income tax charitable deduction, offsetting much of their current tax bill.

The Goodmans continue to have responsibility for property taxes, insurance, and upkeep of the property. Yet they also can be certain that the condo will someday provide their designated charity with a generous gift.

Feel free to call me with your planned giving questions at 614-338-2365.

Article appears as originally published in the Ohio Jewish Chronicle, October 29, 2015.

Jackie Jacobs is the Chief Executive Officer of the Columbus Jewish Foundation, the Central Ohio Jewish community’s planned giving and endowment headquarters.

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