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1-800-915-6789
legacy@defenders.org
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Washington, DC 20036
Defenders’ Awards
Charitable Bargain Sales
(Gift example)
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You're ready to move to a retirement facility across town. You know that you will need some of the equity in your current home for the entry fees there. But your home has appreciated significantly over the years, and you would like to use some of the excess value to fund a gift to Defenders of Wildlife.
Example
You and your spouse donate a personal residence having an appraised value of $500,000, and an adjusted cost basis of $100,000 in a Charitable Bargain Sale arrangement. Bargain Sale price of the property is $125,000, payable in cash. Here are the calculations:
Charitable Bargain Sale
Total |
Sale Portion |
Gift Portion |
|
Value |
$500,000 |
$125,000 |
$375,000 |
Basis |
$100,000 |
$25,000 |
$75,000 |
Gain |
$400,000 |
$100,000 |
$300,000 |
Summary of Benefits
Gift to Defenders of Wildlife |
$375,000 |
Payment to donor |
$125,000 |
Charitable deduction |
$375,000 |
Reportable capital gain on sale portion |
$100,000 |
Capital gains tax on sale portion (15%) |
$0* |
Capital gain forgiven on gift portion |
$300,000 |
Capital gains tax savings on gift portion (15%) |
$45,000 |
*Since there is a capital gains tax exclusion of $500,000 per couple on the sale of a personal residence, all capital gains tax is avoided in this example.
PLEASE NOTE: This example is for illustration
purposes only and is not intended as legal or tax advice. Consult your
own legal and tax advisors prior to making any material decisions based
on this date.
For more information
Email us, complete the personal illustration form, or call us at 1-800-915-6789 so that we can assist you through every step of the process.
