2.1.1 Basic Quiz -- Bargain Sale to Charity

In a bargain sale, a donor sells property to a charity for less than the full fair market value of the property.

True False

Most bargain sales are done with long-term capital gain property.

True False

By offering a bargain sale to a charity, the donors may select a convenient closing date for the sale and potentially avoid some of the selling costs.

True False

Before a charity agrees to a purchase price for the property, it should obtain its own appraisal, do a title search, check for liens or taxes owed and, if commercial property is involved, have an environmental impact survey performed.

True False

With a bargain sale, it may be possible for the donor to receive cash from the sale without paying any capital gains tax.

True False

The deduction in a bargain sale is always the excess of fair market value over the sale price.

True False

If a bargain sale is done with tangible personal property, the deduction will always be reduced to cost basis.

True False

When a bargain sale is done with a personal residence, the donor or donors can use the full $250,000 or $500,000 home exclusion to offset capital gain if they meet the IRS requirements.

True False

In a bargain sale, the donor's basis in the property must be prorated between the sale portion and the gift to charity.

True False

If a bargain sale produces a large deduction that the donor is not able to use in one year, he or she can carry over the deduction for up to five additional years.