Parntership Donations

[kpangelinan]

A partnership owns some land appraised at $1,000,000. A non-profit association wants to purchase this property for $800,000. Can the partnership sell the property for $800,000 and have the partners take the $200,000 as a charitable donation?

[Gretel]

A partnership owns some land appraised at $1,000,000. A non-profit association wants to purchase this property for $800,000. Can the partnership sell the property for $800,000 and have the partners take the $200,000 as a charitable donation?

I think then they would have to report the full appraisal amount as income.

[BOB W]

A partnership owns some land appraised at $1,000,000. A non-profit association wants to purchase this property for $800,000. Can the partnership sell the property for $800,000 and have the partners take the $200,000 as a charitable donation?

Research "Bargain Sale" and how to report contribution.

http://www.philanthromedia.org/archives/2004/10/bargain_sales_to_charity.html

[JON]

Bob has it

and most charities will present exactly how to do it and pay for the paper work ie appraisals. They have done them before and have good expertise - we hope.

[Burke]

I think then they would have to report the full appraisal amount as income.

You are exactly right. The price they sell it for is what they report as income (gross proceeds). They cannot then deduct another $200,000 unless they include it in income first.

[BOB W]

You are exactly right. The price they sell it for is what they report as income (gross proceeds). They cannot then deduct another $200,000 unless they include it in income first.

Go into my post above to the link to see how it gets reported after a formula is applied to all facts. The formula gives a nice tax break on capital gains portion.