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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7536
Experience:  15years with H & R Block. Divisional leader, Instructor
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I have a church that is interested in buying my business to

Customer Question

I have a church that is interested in buying my business to use the land and building to expand their congregation. Is there any deduction on capital gaines taxes when selling commerical property to a church or non profit organization
Submitted: 1 year ago.
Category: Tax
Expert:  Robin D. replied 1 year ago.

Robin D :

Hello and thank you for using Just Answer,
Unfortunately, no, there is not capital gains benefit when selling to a nonprofit. You would handle the sale in the same way, your gain (difference in basis and slae price) will be taxable.

Customer :

Is there any alternate structure in the sale, such as part of the sale as a charitble donation that could help me in the capital gaines area of this saleI . Because they would not want to purchase the fixtures and funishings, the sale would be primarily land and building...

Robin D :

Only if you gave them portions of the property instead of selling. You would need to actually have no payment to you though for that portion. If you only sold them the land and the building then you could donate the furnishings as long as they are not a permanent part of the building. It could raise eyebrows were you to donate the building and sale the land, especially if the land were at an inflated price.

Robin D :

A bargain sale of property to a charitable organization is partly a sale or exchange and partly a charitable contribution. If a charitable deduction for the contribution is allowable, you must allocate your adjusted basis in the property between the part sold and the part contributed based on the fair market value of each. The adjusted basis of the part sold is figured as follows.

Adjusted basis of
entire property ×
Amount realized
(fair market value of part sold)
Fair market value of entire
property
Robin D :

If you would like to see more on how a bargain sale works when made to a charitable organization
http://www.irs.gov/publications/p544/ch01.html#d0e236
Chapter 1

Robin D :

You will still have a gain even if the amount realized is not more than your adjusted basis in the property.

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