Giving Back Through a IRS Section 170 Bargain Sale

Welfont is a boutique commercial brokerage company that focuses on helping our clients find, analyze, finance, purchase, manage and sell commercial real estate properties. We specialize in representing real estate investors and tax-exempt institutions. Using IRS-approved tax strategies, including 1031 Exchange and the IRS Section 170 Bargain Sale, we help clients reach their giving potential. Welfont Joe Johnson   is the CEO of the company.
Have you often thought you’d like to do something to help a favorite charity, beyond your usual donation? Whatever your philanthropic desires, an IRS Section 170 Bargain Sale could be the answer. Since 1917, when this IRS regulation was made into law, the Bargain Sale has been used to benefit nonprofits. Furthermore, this law encourages philanthropy and has done so for nearly
Give back to your favorite charity through an IRS Section 170 Bargain Sale

100 years. So, the Bargain Sale allows taxpayers to make donations in the form of commercial real estate. It is not uncommon for a commercial real estate owner to have a property that is sitting idle. Rather than generating revenue, it is creating expenses. The Bargain Sale can help this owner dispose of this property but also can help a nonprofit gain an affordable property. Additionally, taxpayers also gain the personal satisfaction of philanthropy. Check out some ways qualified nonprofits could utilize difficult-to-sell commercial properties:
  • An empty lot is developed into a community park.
  • Veterans are housed in a former hotel that is in need of repair and no longer in operation.
  • An unused production facility is converted into a vocational-technical campus.
  • A dormant building becomes a library.
The Bargain Sale Process
How can a useless property serve your philanthropic side? Where do you begin? What is the process? Consider offering your property to a qualified charity. But then you think that you can’t afford to just give away your property. You’ll be glad to know how the IRS Section 170 Bargain Sale works:
  • First, a property is sold at a greatly reduced rate to the charity.
  • Then, the buyer (the nonprofit) accepts the offer, and the seller receives cash at closing.
  • Additionally, the seller receives a charitable contribution tax deduction at closing. The tax deduction is the the difference between the sale price and the fair market value of the property.
  • Next, the nonprofit receives an acquisition they can use or resell.
  • The seller may have a substantial tax liability. As a result, the seller could yield a higher net profit than in a traditional sale.
In conclusion, the Bargain Sale works very well because of the simplicity of the process and the benefits to both parties. Generous sellers give back to nonprofits and get a tax deduction. Nonprofits receive properties at a minimal price they can use or resell. Welfont takes the lead on Bargain Sale transactions, and so can guide you through the process.

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