?'s for purchasers of Tax Default propertys - Posted by magician2000

Posted by David Krulac on March 15, 2002 at 09:00:43:

for donating property several obstales are finding a charity willing to accept the donation, and making sure that the charity is approved by the IRS. Those problems are not insignificant. we have sucessfully donated property and it is not easy to meet all the requirement and make it work.

I was high bidder on a house for $90,000 when the taxes owed were only $2,000 (min bid). but that’s another story.

David Krulac

?'s for purchasers of Tax Default propertys - Posted by magician2000

Posted by magician2000 on March 14, 2002 at 22:22:35:

  1. Do you ever look for any properties other than those that are improved? (ie. commercial, SFH, or Multi-Units)

  2. Do you ever bid more than the minimum asking price for these properties? (I know that there are alot out there, some not worth 1/2 of the asking price, but others worth many times more)

  3. Have you ever considered picking up vacant home lots drasticly under priced, (ie. $1200 for and FMV of 40K) and then look to donating it to a charity like Habitat for Humanity, for the full tax deduction?

Re: ?'s for purchasers of Tax Default propertys - Posted by JT-IN

Posted by JT-IN on March 15, 2002 at 07:08:13:


  1. Yes, I have bought several commercial props in this manner, with large outstanding taxes owed. The largest tax deficiency that I have bought was $ 131,964. (this was min. bid) on a prop worth about $ 350K. In SW Ohio, where this property was purchased, I bought the property at Tax Sale, receiving a deed and not a certificate. Obviously, if you were simply buying certs, the strategy may be considerably different, but not completely familiar with that process. You may want to ask Ben(NJ), as he seems to be the resident expert on Tax Certs… and he is a Lawyer as well.

  2. Yes, depending upon FMV, and my desire for the property, I may bid far in excess of the taxes owed. Each case is different.

  3. No… it is just not something that I have considered seriously. I have looked at the requirements of holding time, and market valuations, adn it is a bit more complex than buying today, and donating tomorrow… As you may imagine, IRS has soe hoops to jump through in this instance, before a legitimate FMV deduction may be taken. You may want to address the specifics of these requirements to John Hyre, Esq., on the legal forum, for complete details. John is a walking tax code…

Just the way that I view things…


Re: ?'s for purchasers of Tax Default propertys - Posted by Dave T

Posted by Dave T on March 16, 2002 at 14:25:04:

About your question #3:

Doesn’t the IRS consider your donation of appreciated real property to be done at your basis? That is, your charitable deduction is your cost basis, not the (much greater) FMV.

Not a tax expert, just asking the question. Perhaps IRS Pub 526 will give you the answer you are looking for.