Selling To Church Organizations And Tax Deductions
It is my understanding that if I sell a property to a church organization for under the appraised value, then the difference between the sales price and the appraisal price can be deductable from my taxes. My question is how would this work if an S-Corp owned a property and it sells it to the church organization for under the appraised amount? Would the deduction pass through to the shareholders like a loss will in an S-Corp?
Thanks
The s corp would treat it as a part-sale/part-gift. The sale and the charitable contribution would be shown on the K-1 and you would report the gain on your Sch D or 4797 and the charitable contribution on Sch A (subject to the charitable contribution limits at the individual level).
The basis of the property has to be split between the sale and the gift for the calculation of the gain.
blueford
Thanks for the help. How would this work if there are 2 members in the S-corp and we sell the property for say $1 million under appraised value? And what are the charitable donation limits?
Thanks
The only thing I can tell you with that, is that your charitable contribution is not $1,000,000. It depends on what the total FMV of the property was, and what your basis in the property was at the time of sale.
Anyone???
C corp or S corp?
It would most likely be an LLC, but possibly an S-Corp.