Bargain Sale Example
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FAQ
Definition: A bargain sale is when property is sold for less than its fair market value. The difference between the sale price and the fair market value must be taken into account for tax purposes. If the sale is between family members, it may lead to gift-tax consequences.
For this reason, a bargain sale is often termed ?part sale, part gift.? For example: A donor wishes to gift an antique to Clarkson but cannot afford to give the entire value of the property. The item was purchased for $25,000 and now has an appraised value of $100,000.