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GiftLaw Pro Home   >  Chapter 2 - Major/Current Gifts  >  2.1 Bargain Sale  >  2.1.1 Bargain Sale to Charity  >  Basic Quiz

Basic Quiz - 2.1.1 Bargain Sale to Charity

1. In a bargain sale, a donor sells property to a charity for less than the full fair market value of the property.
           
2. Most bargain sales are done with long-term capital gain property.
           
3. By offering a bargain sale to a charity, the donors may select a convenient closing date for the sale and potentially avoid some of the selling costs.
           
4. Before a charity agrees to a purchase price for the property, it should obtain its own appraisal, do a title search, check for liens or taxes owed and, if commercial property is involved, have an environmental impact survey performed.
           
5. With a bargain sale, it may be possible for the donor to receive cash from the sale without paying any capital gains tax.
           
6. The deduction in a bargain sale is always the excess of fair market value over the sale price.
           
7. If a bargain sale is done with tangible personal property, the deduction will always be reduced to cost basis.
           
8. When a bargain sale is done with a personal residence, the donor or donors can use the full $250,000 or $500,000 home exclusion to offset capital gain if they meet the IRS requirements.
           
9. In a bargain sale, the donor's basis in the property must be prorated between the sale portion and the gift to charity.
           
10. If a bargain sale produces a large deduction that the donor is not able to use in one year, he or she can carry over the deduction for up to five additional years.