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Charitable Bargain Sales
(Complete gift description)
Does the value of your home or other property make up a significant portion of your portfolio? A charitable bargain sale will enable you to make a gift of real estate or other assets to Berkeley and receive cash back from us.
In a bargain sale, Berkeley purchases real estate or securities from you for less than fair market value. The difference between market value and the purchase price is your gift, for which you receive an income tax deduction. You also avoid capital gains tax on the donated portion of the property.
It works like this:
- You and Berkeley agree on a purchase price that is less than the property's fair market value, which has been determined by your independent appraiser.
- We may pay the purchase amount upfront, or issue you an installment note for a mutually agreed upon term of years and interest rate.
Some donors choose a lump-sum bargain sale payment to help them purchase their next home, or as the entry fee for a retirement facility. Others prefer the income stream from an installment note.
Planning points
- As with all gifts of real estate, we must review and approve the transfer before the bargain sale can be completed.
- If you want to transfer real estate or securities that are not publicly traded, you must secure an independent appraisal to establish the property's value for the charitable deduction.
- Transferring property that carries a mortgage or other debt can result in income tax liability. We can discuss this with you and your advisors as you are considering your gift.
For more information
Email us, complete the personal gift proposal form, or call us at 510-642-6300 so that we can assist you through every step of the process.
