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Gift Planning

Real Estate—Bargain Sale

A donor who wants to recover a portion of the value of the property that he or she wishes to contribute to Butler may consider entering into a bargain-sale transaction. In effect, a bargain sale is a sale of property to charity for less than its fair-market value. The bargain-sale price must be any amount mutually acceptable to the charity and the donor.

Example: Jonathan, 78, owns a vacation home he no longer uses. He bought the home for $40,000 some years ago, and it is now worth $120,000. He offers to sell it to Butler for $40,000. As a result, he receives $40,000 from Butler and can deduct the contributed portion of $80,000 for income-tax purposes. Jonathan must also report a capital gain of $26,667. (The reportable capital gain is calculated by dividing the sale price of $40,000 by the fair-market value of the property—$120,000—and multiplying the result by the gain—$80,000.)

More Information

Contact Us

Office of Gift Planning
Max Harper
Director of Development and Planned Giving
317-940-9028
mdharper@butler.edu

 

Butler University
4600 Sunset Ave.
Indianapolis, IN 46208

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