Hi,What you are describing is called a "bargain sale". Donor has property worth X. Donor has a current appraisal attesting to that fact. He/she agrees to sell property to your organization for Y, which is $100,000 (for example) less than the value of the property.
Donor gets to take $100,000 off income tax for selling you the property at a discount.
If the donor does not need the tax advantage in the current year, the donor can take the donation over a period of years until the value of the donation is used. Maximum number of years is 5.
There are many, many different ways of structuring such a gift.
For example, in a wealth replacement trust, the donor can make the gift and take out life insurance in the value of $100,000. At the donor's death, the benefits of the insurance policy are placed in the trust and passed onto donor's heirs tax-free.
So, the donor gets the tax deduction of $100,000 for selling the property at a bargain and escapes inheritance taxes via the wealth replacement trust. The cost to the donor is the premium for the insurance policy. (No, your organization can not pay that premium for the donor because the donor would then have the value of the premium deducted from allowable charitable contributions because the premium would then be a benefit to the donor.)
At any rate, you can contact a planned giving professional, the President of the local community foundation, or a tax attorney to help walk you through the process. Your donor will also want his tax accountant and attorney in on the discussions. State laws that govern estate taxes and legal filings are slightly different in each state, so good attorneys for both you and your donor, separately, are excellent investments before you make the deal.
Hope some of this helps,
Carl
