Charitable Bargain Sale

What is a Charitable Bargain Sale?

Suppose you would like to give a residence or other real estate to Oxford University, but you have an outstanding mortgage that you need to pay off. Or, suppose you need cash for a down payment on a retirement home. A Charitable Bargain Sale may be a great way for you to benefit Oxford University and yourself at the same time.

How Does It Work?

Part sale and part gift, a Charitable Bargain Sale is conducted under special IRS rules. You and Oxford University agree to a purchase price for your property that is less than the property’s market value as determined by a qualified appraisal. Oxford University pays you the purchase price in cash, an installment note, or a combination of both as mutually agreed upon. This payment is typically designed to provide you the cash to retire a mortgage or for other purposes. You qualify for a charitable income tax deduction for the gift portion of the transaction. You will be liable for capital gains tax on the sale portion only.