What’s your opinion on this….

[Nate Riley]

I suppose that it would be legal if the sales price was reported at $850,000. The donation could be entered in the settlement papers as a $250K credit to the buyer, leaving $600K plus other misc. closing costs due on the bottom line. I'm no tax attorney or CPA, just saying that if the deal is clearly documented and agreed to, it is none of the IRS's business. It is really no different than the church paying full price and then the guy makes a $250K donation after funding. What would be problematic is if the guy reported the sale at $600K and then claimed a $250K donation without the church having a $250K deposit to verify the receipt.

The donation would be the difference between the sale price and the "fair market value". The settlement statement would cover the agreed upon sale price, as normal. The fair market value is established by the seller, normally/frequently documented with an appraisal, when "doing" their taxes.

[AntlerCollector]

It’s stealing money from the thieves in Government who steal it from us.

[lmartin5]

That Church needs to be exposed and out of business.

Truth!


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[FLASH_OUTDOORS]

I'm certainly not trying to absolve either party, but I would agree with this. As a commercial appraiser who does donation appraisals, I would imagine that there is quite a bit more to the story or at least additional facts (including an appraisal) that would help us all to understand the situation better. The simplicity of the original post many have allowed some of us the room to make unfair judgments (especially about the church).

This is referred to as a "Bargain Sale to a Charitable Organization" in case anyone wants to research it.

The property will appraise at $1M. The seller is listing at 850k for a quick sale. The church is saying they will give him 750k and a receipt for 250k as a donation if it appraises for 1M. He actually said “we will give you more if it appraises for more.”

He was only asking $850. If he takes the deal he would only be donating $100k regardless of what it appraised at.


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[Hoggslayer]

The property will appraise at $1M. The seller is listing at 850k for a quick sale. The church is saying they will give him 750k and a receipt for 250k as a donation if it appraises for 1M. He actually said “we will give you more if it appraises for more.”

He was only asking $850. If he takes the deal he would only be donating $100k regardless of what it appraised at.


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But if the appraised value is $1m he is allowed to claim that value for the purpose of donation evaluations. It doesn't sound like the church is doing anything wrong to me.

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[Preacher Man]

The property will appraise at $1M. The seller is listing at 850k for a quick sale. The church is saying they will give him 750k and a receipt for 250k as a donation if it appraises for 1M. He actually said “we will give you more if it appraises for more.”

He was only asking $850. If he takes the deal he would only be donating $100k regardless of what it appraised at.


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Initially I was ready to get out the torch and pitch fork. But this is a different situation. Sounds like a gift of equity and would be above board in that case.

[FLASH_OUTDOORS]

But if the appraised value is $1m he is allowed to claim that value for the purpose of donation evaluations. It doesn't sound like the church is doing anything wrong to me.

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What I don’t get is he was only asking $850k. He technically only gave them a gift of 100k. But because it will appraise at 1M or more he could be given a gift receipt for 250-400k depending on appraisal????

He could technically be making more money by selling to this church than if someone would have just bought it at asking price……..


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[Bucknaked]

Typical!!!

Open mouth insert foot!

[Hoggslayer]

What I don’t get is he was only asking $850k. He technically only gave them a gift of 100k. But because it will appraise at 1M or more he could be given a gift receipt for 250-400k depending on appraisal????

He could technically be making more money by selling to this church than if someone would have just bought it at asking price……..


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Sounds to me like the church is being a good steward and looking out for the best interest of their neighbor.

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[Nate Riley]

The property will appraise at $1M. The seller is listing at 850k for a quick sale. The church is saying they will give him 750k and a receipt for 250k as a donation if it appraises for 1M. He actually said “we will give you more if it appraises for more.”

He was only asking $850. If he takes the deal he would only be donating $100k regardless of what it appraised at.


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And that is the additional information we need.

But if the appraised value is $1m he is allowed to claim that value for the purpose of donation evaluations. It doesn't sound like the church is doing anything wrong to me.

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Nobody is doing anything wrong here. All parties are following the letter of the law for IRS purposes. (I'm not sure he even needs a receipt from the Church, but I'm not an accountant just a real estate guy.)

In the end, the seller will still lose real money below the $850,000 he was asking. Depending on his tax bracket, the sale price plus tax savings would probably be $800,000 to $825,000.

[rolylane6]

In the end, the seller will still lose real money below the $850,000 he was asking. Depending on his tax bracket, the sale price plus tax savings would probably be $800,000 to $825,000.

[emoji106]


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[RWB]

[QUOTE=FLASH_OUTDOORS;16270977]What I don’t get is he was only asking $850k. He technically only gave them a gift of 100k. But because it will appraise at 1M or more he could be given a gift receipt for 250-400k depending on appraisal???

People sell houses all the time above asking price. Asking price does not determine actual market value.

[WItoTX]

What I don’t get is he was only asking $850k. He technically only gave them a gift of 100k. But because it will appraise at 1M or more he could be given a gift receipt for 250-400k depending on appraisal????

He could technically be making more money by selling to this church than if someone would have just bought it at asking price……..


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The write off isn't a dollar for dollar chunk of money. I only know this because we did something similar, on a much smaller scale.

The reality is he is getting $750,000 when asking $850,000, and he needs to run the extra $250,000 through his tax guy to see where he would actually end up at with the donation.

I don't see the church doing anything wrong in this situation. I would argue it's one of the bargaining chips we, as a society, have afforded a church/religion because most are run on shoestring budgets.

[Death from Above]

Discounting goods/services and receiving charitable tax credits is a very common practice in the non profit sector.

Nothing shady about it as long as the accounting is done in a lawful manner.

[wellingtontx]

Possible Fraud and tax evasion on the "extra" donation - depending on how numbers work out