Receive immediate cash and make a gift to The Foundation by selling to us a valuable asset, such as real estate, for less than it is worth.

A bargain sale may be right for you if:

  • You want additional cash now.
  • You want to save income taxes and possibly capital gains taxes.
  • You own a valuable asset that you are willing to sell for less than it is worth.
  • You want to make a gift to The Foundation.

How It Works

You sell real estate or other property to The Foundation for less than it is worth.
You receive immediate cash equal to your sale price. Your property becomes ours to use or sell.

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A bargain sale is a simple agreement in which you sell property, such as real estate or some other valuable asset, to The Foundation for less than the property is worth.

Eligible property
It is possible to sell any sort of property to us for a bargain price. In addition to real estate, you can complete a bargain sale arrangement with collectibles such as artwork or antiques, other personal property, or securities. Please contact us about the property you are considering so that we can discuss whether we would be interested in acquiring the property for a bargain price.

Tax benefits
You will receive an income tax charitable deduction in the year of your gift. The amount of your deduction will equal the difference between the fair market value of the property you donate and your sale price.

You will also avoid capital gains tax on a portion of your capital gain in the gift property. For example, if you sell your property to us for one third of its fair market value, you will pay capital gains tax on just one third of your capital gain in the property.

By removing your property from your estate, you may also reduce estate taxes and probate costs when your estate is settled.

Special considerations
If you are interested in selling us real estate or tangible personal property at a bargain price, you will need to establish the value of your property by obtaining a qualified independent appraisal.

To be valid for claiming your income tax charitable deduction, your appraisal must be conducted no more than 60 days before the bargain sale is completed and no later than the due date, including extensions, of the tax return for the year in which you make your gift.

If you are considering a gift of real estate, our organization requires the following additional steps before we accept your gift:

  • Independent of your appraiser's valuation, we will need to examine your property and conduct our own analysis of its value. For example, we will want to know if there are any debts, taxes, or liens owed on your property.
  • Once we accept your gift of real estate, we become responsible for cleaning up any environmental problems your property may have. This sort of cleanup could be very expensive. Therefore, before we accept any gift of real estate, we routinely conduct a review to make sure the property has no environmental issues.

Example

Luke Ambrams, a devoted supporter of The Foundation, owns vacant land that he purchased years ago for $15,000. The land was recently appraised at $250,000. Luke would like to make a major contribution, but he is planning improvements to his home, and he needs about $50,000 to finance his project.

Luke is thrilled to learn that a bargain sale arrangement will allow him to make the contribution he envisions and get the cash he needs to complete his home improvement project. He’s also pleased with his $200,000 income tax charitable deduction, which will create tax savings in the year of his gift that more than offset the capital gains tax he’ll need to pay. This example assumes Luke is able to itemize his income tax charitable deduction.  

Facts  
Value of land $250,000
Cost of land $15,000
Capital gain $235,000
Sale price $50,000 

 

Benefits  
Income tax deduction $200,000
Capital gain to report $47,000
Capital gain avoided $188,000
   
Income tax saved at 37% rate * $74,000
Capital gain tax at 20% rate - $9,400
Net tax savings   $64,600
   
Cash to Luke + $50,000
Total benefit to Luke  $114,600

*Assumes 37% rate and thatLuke itemizes his income tax charitable deductions.