Charitable Bargain Sale
How It Works
- You sell your residence or other property to IHC for a price below the appraised market value — a transaction that is part charitable gift and part sale.
- IHC may use the property, but usually elects to sell it and use the proceeds of the sale for the gift purposes you specified.
- You receive an immediate income tax deduction for the discount you took from the appraised market value of your property.
- You pay no capital gains tax on the donated portion of the property.
- You can receive payment from us in a lump sum, or in fixed installments.
Frequently Asked Questions
What if the property has a mortgage or other lien on it?
The mortgage or lien can and should be paid off prior to the bargain sale or with the sale proceeds received by the previous owner. This produces the best tax benefit to the donor/seller. If the charity assumes the lien or mortgage then this is considered taxable income to the donor/seller.