Bargain Sale of Appreciated Principal Residence

[gfizer]

Client has decided to sell her principal residence to her church to be used as a parsonage.  She has agreed to transfer the property to them for her basis in the home.  The home has appreciated in value and is worth (she believes) $15-$20K more than her basis.  I'm thinking this is a bargain sale and that she can obtain an appraisal from a qualified appraiser to substantiate the current fair market value, thereby giving rise to a charitable donation for the difference between the bargain sale amount and the FMV.  Thoughts? Opinions? Am I missing something?  Thanks in advance.  You guys rock!

[Lee B]

Getting a "Qualified Appraisal " right now may be both difficult and expensive.

 

[Max W]

It is not a sale, it is a gift and FMV will only come into play if the church sells the property at a loss over the donor's basis.

 

[jklcpa]

5 hours ago, gfizer said:

Client has decided to sell her principal residence to her church to be used as a parsonage.  She has agreed to transfer the property to them for her basis in the home.  The home has appreciated in value and is worth (she believes) $15-$20K more than her basis.  I'm thinking this is a bargain sale and that she can obtain an appraisal from a qualified appraiser to substantiate the current fair market value, thereby giving rise to a charitable donation for the difference between the bargain sale amount and the FMV.  Thoughts? Opinions? Am I missing something?  Thanks in advance.  You guys rock!

Your thinking is correct.  Taxpayer will need a qualified appraisal to determine the FMV.  The client ends up as both the seller for the cash received and the donor for the excess of FMV over the selling price. Basis is prorated to between the portion sold and the portion donated. 
 

This has a pretty good summary of how it works: https://www.ccim.com/cire-magazine/articles/287370/2013/03/real-estate-gifting-realized-bargain-sales/