Donating Notes to Charity - Posted by Larry

Posted by Michael Morrongiello on March 25, 2000 at 22:52:41:

I am not a tax practioner but is my understanding that you may be able to deduct the principal balance outstanding on the note regardless of what you acquired it for or how it was created.

Many charities I have dealt with over the years sell their real estate holdings and create paper which then then sell for cash. They also have liquidated real estate secured paper that was donated as well for cash.

Michael Morrongiello

Donating Notes to Charity - Posted by Larry

Posted by Larry on March 25, 2000 at 20:49:20:

Does anyone know about/have experience with donating notes to Charity, and what the tax advatages of doing so are? I understand how donating stocks or real estate with significant capital gains can offer extra tax advantages, but do the same rules apply to donating paper? I’ve heard differing opinions, even from CPAs, on the matter and would appreciate hearing how it works. Specifically, I’d like to know what the value of such a gift is. With stocks or real estate, you can deduct the current fair market value, even if you paid less than FMV for it. In addition, you get the added benefit of avoiding capital gains tax on the stocks or property. How would they figure FMV of a note? TIA