Bargain sale

A bargain sale occurs when a seller voluntarily sells a property to a non-profit such as Western Reserve Land Conservancy for less than full fair market value. For example, Landowner A owns a $1,000,000 property, which he/she decides to sell to Western Reserve Land Conservancy for $600,000. The transaction will have two components. First, there is a sale portion in the amount of a $600,000 payment that we make to Landowner A. Second, there is a charitable gift component of $400,000, which is a gift from Landowner A to Western Reserve Land Conservancy, that qualifies as a charitable gift under the internal revenue code.

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