Is That Really the Bargain Price?Is That Really the Bargain Price?

With the holiday shopping season in full swing, many consumers enjoy the search for a bargain. In the world of philanthropy, there are “bargains” as well. The recently decided case of Braen v. Commissioner¹ shows how easily the benefits of a bargain may be lost without proper documentation and calculation of the “net” provided to charity. 

Overview

The most common form of bargain is the charitable gift annuity. That involves the transfer of an asset to a charity for less than full and adequate consideration with a gift annuity agreement documenting the charitable intent. The charitable income tax deduction is the difference between the fair market value (FMV) of the asset less anything of value received by the transferor from the charity.