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Charitable Bargain Sale

  • 1.  Charitable Bargain Sale

    Posted 29 days ago
    Is there a limitation as to what constitutes "property" for the purpose of a bargain sale?  There was mention in another string that Services aren't gifts and thus don't qualify as bargain sales.  Beyond that, as long as it's an item that the vendor would otherwise sell (ex chocolate bars), could essentially all items qualify as bargain sales if sold to the charity at a discounted rate?  

    Reading through IRS 526 and 544, there is much talk of "Property" which tends to go into greater detail as real estate, but no description that I could find as to what does and doesn't constitute "Property".

    Thanks!



    --
     Gwen Donev

    Director of Advancement Services

    Gustavus Adolphus College

    800 West College Avenue

    Saint Peter, Minnesota 56082

     

    Email:  gwendonev@gustavus.edu

    Office:  507.933.6515



  • 2.  RE: Charitable Bargain Sale

    Posted 29 days ago
    As long as it is not a service or "partial interest," I believe the "bargain sale" rule can apply to other non-cash items.  But remember that the "bargain" must be above that which the vendor automatically offers to nonprofit organizations and educational institutions.

    John

    John H. Taylor
    Principal
    John H. Taylor Consulting, LLC
    2604 Sevier St.
    Durham, NC   27705
    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987






  • 3.  RE: Charitable Bargain Sale

    Posted 29 days ago
    Gewn, a service can be sold as a "bargain sale", but it doesn't generate any tax advantage when it is sold to a nonprofit. The reason is that the 'extra' that would be considered a donation is service, and donations of service don't qualify as charitable donations for which you get a tax deduction. The issue isn't that the service isn't 'property', it's that it isn't tax deductible as a donation.  The rights to a service, e.g. a concert ticket, is property.

    There are two kinds of property - real property (land) and personal property, which is any movable thing or intangible item of value that is capable of being owned by a person. Chocolate bars would certainly qualify!

    Thank you,
    Isaac Shalev
    Data Strategy Expert
    Sage70, Inc.
    (917) 859-0151
    isaac@sage70.com

    Schedule a 30-minute consultation now:






  • 4.  RE: Charitable Bargain Sale

    Posted 29 days ago
    Great, thank you!