More about Charitable Bargain Sales

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 the Mercy Foundation and receive cash back.

In a bargain sale, the Mercy Foundation purchases your real estate or securities for less than fair market value. The difference between market value and the purchase price is your charitable 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:

1. You and the Mercy Foundation agree on a purchase price that is less than the property's fair market value, which has been determined by your independent appraiser.
2. The Foundation pays the purchase amount upfront, or issue you an installment note for a mutually agreed upon term of years and interest rate.

Planning points

• the Mercy Foundation must first 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 assistance with this gift plan, please complete the request information form or contact the Mercy Foundation at (209) 564-4200 or e-mail to MercyFoundationMerced@DignityHealth.org.

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