The donated property does not have to be a principal residence, which means the donor's vacation or other home may be used in making the gift. As for the definition of a farm, the IRS says it must be land used by the donor or his tenant for the production of agricultural products or the raising of livestock.
The donor receives a charitable income tax deduction based on the gift's remainder value. Computing the charitable deduction for a remainder interest involves several factors. The fair market value of the property, the estimated useful life of the structure and the value of the structure at the end of its useful life must all be determined. These values must be obtained from a qualified appraiser.
A donor is allowed by law to deduct up to 30 percent of his or her adjusted gross income when making a charitable gift of appreciated property and is allowed to carry forward any unused portion of the remainder value for a period of five additional years, if necessary.
A Life Estate Agreement is an excellent alternative for the donor(s) who would like to leave a residence to Shriners Hospitals for Children®, but needs the use of the residence during their lifetime.