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 may be the right strategy for you.
Flowchart: Donor sells property to Summa Health 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
- You avoid capital gains tax on your charitable gift.
- You receive a tax deduction that will reduce your tax bill this year.
- You 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.
- You help to advance the mission of Summa Health.
How a bargain sale works
- You sell Summa Health your property for 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 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 Summa Health, the charitable deduction from your gift could offset some of the 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 would like more information about a bargain sale, please contact us. We would be happy to assist you.