Bargain Sale

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Receive immediate cash and make a gift to St. Anthony Shrine 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 itemize your deductions and want to save income taxes.
You want to save capital gains tax on the sale of your property.
You own a valuable asset that you are willing to sell for less than it is worth.
You want to make a gift to St. Anthony Shrine.

How It Works

You sell real estate or other property to St. Anthony Shrine 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 St. Anthony Shrine for less than the property is worth.

Eligible property

It is possible to sell any sort of property to St. Anthony Shrine 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 qualify for 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. Your income tax savings will depend on if you itemize your deductions as well as other factors. (Note that if your bargain sale asset is tangible personal property, such as artwork or antiques, that St. Anthony Shrine does not put to a use related to our exempt purpose, the amount of your deduction will be based on your cost basis rather than the fair market value of the property.)

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. If the asset you sell to us is subject to debt, this debt will be added to your sales proceeds to determine your capital gains tax.

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. There are other requirements for the appraisal to be “qualified” to support a deduction, so you should consult with your advisors before hiring an appraiser.

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

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 could 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

Herman Lucas, a devoted supporter of St. Anthony Shrine, owns vacant land in an area under rapid development that he purchased years ago for $15,000. The land was recently appraised at $250,000. Herman 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.

Herman 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 Herman itemizes his income tax deductions, and is based on a number of other factors such as Herman’s adjusted income and appliable capital gains rate.

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 Herman	+ $50,000
Total benefit to Herman	$114,600

*Deductible up to 30% of adjusted gross income per year for 6 years.
**Assumes 37% rate, that Herman itemizes his income tax deductions, and has enough income to be entitled to claim the entire $200,000 deduction.

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Readings For Tuesday, October 08, 2024

Today’s Presiders:

October 8, 2024

6:00 am - Fr. Charles O'Connor
7:00 am - Fr. Charles O'Connor
12:05 pm - Fr. Hugh Hines

Today’s Confessors: