DEFINITION of 'Bargain Sale To A Charitable Organization'

The sale of a good or service to a charitable organization for less than the fair market value of the good or service received.

Bargain sales are often used by donors who wish to make a charitable donation to an organization in a form other than cash. In some cases, the property transferred is exchanged for other similar property of lesser value, and the difference is considered a gift.

BREAKING DOWN 'Bargain Sale To A Charitable Organization'

If the property being sold has appreciated in value, the cost basis must be divided proportionately between the portion of the property that is actually sold and the remainder that is donated. The gain on the portion of the property that is sold must then be reported as income. The donation portion is written off, within the limits of charitable contributions for appreciated property.

  1. Charitable Donation

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  2. Qualified Charitable Organization

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  3. Form 8282: Donee Information Return

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  4. Charitable Contributions Deduction

    One of the itemized deductions available for taxpayers who donate ...
  5. Proof of Charitable Contributions ...

    Substantiation required by the Internal Revenue Service for a ...
  6. Immediate Beneficiary

    A beneficiary designation most commonly used in charitable gift ...
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