Bargain Sale
Do you have property that you would like to sell? Are you looking for a strategy to reduce your income taxes? A bargain sale might be the right strategy for you.
Flowchart: Donor sells property to EHC below fair market value and claims a charitable deduction for the difference between fair market value and the sale price.
Benefits of a bargain sale
- Avoid capital gains tax on your charitable gift
- Receive a tax deduction that will reduce your tax bill this year
- Take the cash received from the sale and reinvest it to create future income, save for retirement, buy new property or achieve other financial goals
- Help Emory & Henry College further our important charitable work
How a bargain sale works
- You sell Emory & Henry College your property for a price less than fair market value.
- You receive cash from the sale.
- You can take a charitable deduction for the value of your gift which is the the difference between the fair market value of the property less the sale price.
- While you may owe some tax on the sale proceeds you receive from Emory & Henry College, the charitable deduction from your gift could offset some, most or all of your capital gains taxes associated with the sale.
More on bargain sales
A bargain sale may be accomplished even if you have a mortgage on your property. Because relief from indebtedness can have tax implications, please consult with your tax advisor prior to completing a gift of a bargain sale.
Contact us
If you have any questions about a bargain sale, please contact us. We would be happy to assist you and answer any questions you might have.
