Tax Consequences Of Commercial Property Transfer To Non-profit

[Zevulun]

What are the tax consequences(both ways)if a US citizen transfers commercial buildings to a US non-profit 501(C)3 company?  The buildings will be used in the day to day operation of the non-profit.  The buildings and the non-profit are located in the state of Mississippi.

[Kirklyn]

I am assuming that the 501(c)(3) organization's board has agreed to accept the real property and has concluded that there is substantial equity in the building.  The donor would then realize a tax deduction based upon the fair market value of the equity. See

IRS Publication 561 "Determining the Value of Donated Property" www.irs.gov/pub/irs-pdf/p561.pdf which discusses on page 2 that the deduction is in the amount of the fair market value. The publication discusses the situation when he value of donation is greater

than $5000. The 501(c)(3) organization has no federal tax consequences of accepting the donation. I have in my profile that this free forum is only for general questions relating to IRS federal exemption issues of 501(c)(3) organizations.  You would also want to consider Mississippi law. Harvey Mechanic, Attorney at Law - [email protected]

P.S. This response is intended to be a general statement of law, should not be relied upon as legal advice and does not create an attorney/client relationship.