Conditions For IRS Section 170 Bargain Sales Transactions

Conditions For IRS Section 170 Bargain Sales Transactions

Sellers in the real estate market who want to dispose of their commercial real estate properties and donate the proceeds to charitable organizations are unaware of what a bargain sales transaction under IRS Section 170 is and how to take advantage of it. This section allows corporate enterprises and other businesses to maximize their profits from the sale of the commercial real estate properties especially when they want to contribute the proceeds of the transaction to finance philanthropic causes. However, most tax and real estate experts are of the view that it is advisable to take the help of competent professions who have the requisite knowledge and experience in this field before undertaking such transactions.

Welfont Group is a reputed prominent commercial brokerage company in Tampa, Florida that specializes in representing and assisting real estate investors along with tax-exempt institutions with managing their commercial real estate properties.  In this endeavor, the experts of this company concentrate on helping such clients search for, scrutinize, finance, buy and sell such properties by employing tax strategies that have the approval of the Internal Revenue Service (IRS). These include 1031 Exchange along with 170 Bargain Sale that go a long way in maximizing the benefits for their customers.

The commercial real estate and taxation specialists from this group state that it is imperative for property owners to understand and appreciate a relatively unknown real estate transaction that may prove to be both beneficial and useful to them. They admit this transaction will go a long way in solving many taxation problems for right businesspersons while introducing them to many lucrative opportunities.

Bargain Sale Transactions and its condition

These experts elucidate that the American Government first promulgated IRS Section 170 Bargain Sale after the First World War in 1917 and amended it in 1950s. However, what most people are unaware of is that this section much more than just a simple tax break. What distinguishes IRS Section 170 Bargain Sale from other relevant tax benefits that the Internal Revenue Service allows the public is that its tax savings in this section is immediate and not a deferral. However, one important restriction under this section is that proceeds of the transaction must go a non-profitable charitable organization that the IRS declares as tax-exempt as per the provisions of Section 501(c)(3).

Any transaction falling under the relevant clauses of IRS Section 170 Bargain Sale allows an owner of a real estate property to sell it and donate the monetary consideration from its sale to a philanthropic organization that the government recognizes. This is the first and most important requirement of this section. Secondly, the property owner has to foresee tax liabilities from the transaction and willing to receive its tax benefits over time. In some cases, sellers do receive the sale value of their property immediately but usually it takes up to five years to get full amount.

In the opinion of the experts of Welfont Group, transactions that fall under the category of IRS Section 170 Bargain Sale may turn out to be beneficial to property owners in certain situations.