From 24/7 Wall St. · David Beren · · 2m
At 71 She Gives House to Church but Keeps Living There
71-year-old woman can deduct taxes now by giving church her house with retained life estate.
In brief
71-year-old woman can deduct taxes now by giving church her house with retained life estate. Woman keeps home while giving church remainder interest, claiming tax deduction for future gift. Originally reported by 24/7 Wall St..
She Keeps House for Life
She’s 71, sitting on the same front porch she’s used for decades, and she isn’t planning to leave.
House Goes to Church Later
She’s already decided the house goes to her church someday.
Tax Deduction Now Possible
She can sign the house over now, keep living in it for the rest of her life, and take a tax deduction this year.
Retained Life Estate Explained
This setup is called a retained life estate. In plain words, she gives the church the house but keeps the right to live there until she dies.
Church Gets Remainder Interest
The church’s share, the part it gets later, is called the remainder interest.
IRS Exception for Her Case
Normally you can’t deduct a gift of only part of something you own. Homes are an exception.
IRS Publication 526 Covers Her
IRS Publication 526 describes almost her exact case: You keep the right to live in your home during your lifetime and give your church a remainder interest that begins upon your death.
Tax Code Supports This
The tax code backs this up in 26 U.S.C. § 170(f)(3)(B)(i). Any qualified charity works. The church is just her pick.
Church Gets Discounted Value
The church has to wait, so the IRS discounts the gift. The math uses IRS actuarial tables tied to her age, plus a monthly interest rate called the Section 7520 rate.
Section 7520 Rate for 2026
For November 2026, that rate is 6.2%.
Depreciation Affects Deduction
The law also requires factoring in depreciation (computed on the straight-line method) on the property.
The essence
Woman keeps home while giving church remainder interest, claiming tax deduction for future gift.
