Categories: General Tax Terms
Bargain Sale to Charity
A bargain sale to charity refers to a transaction in which a donor sells property to a charitable organization for less than its fair market value.
In this arrangement, the difference between the fair market value of the property and the sale price constitutes a charitable contribution. For example, if a piece of real estate valued at $100,000 is sold to a charity for $70,000, the donor can claim a charitable deduction of $30,000 on their tax return. This deduction can provide tax benefits while allowing the donor to support a charitable cause.
It’s important for donors to document the fair market value and the terms of the sale to ensure compliance with IRS regulations regarding charitable contributions.
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