A gift of a remainder interest in a personal residence or farm provides the donor with a charitable deduction for the present value of the remainder interest and permits the donor to escape any potential capital-gain tax on the built-in appreciation. What may be more important from the donor's point of the view is that he or she can continue to occupy the residence or operate the farm without disruption.

The term personal residence is broadly defined to include any property used by the taxpayer as a personal residence even though it is not the donor's principal residence. A personal residence may include a single-family dwelling or stock owned by the donor as a tenant-stockholder in a cooperative housing corporation, condominium, or vacation home. The term farm includes any land used by the donor or his or her tenant for producing agricultural products or raising livestock.

Making such a gift does not require that the donor remain in the residence. A donor who moves has several options: renting out the property and retaining the rent; converting the retained life interest to a stream of payments for life; selling and dividing the proceeds with the charity in proportion to their respective interests in the property; or making an additional gift of the retained interest.  

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