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Charitable Bargain Installment Sale (CBIS)

This is a transaction whereas a donor sells their asset(s) (i.e. Real Estate) to the Charity (i.e. NISS Foundation) in return for installment payments that comply with IRC Section 453 and IRC 1011b. Here the installment payments established must be a fixed amount, fixed rate of interest and have a fixed payment term or duration (i.e. 10 years, 20 years, etc.). The donor/seller may defer receipt of their payments or opt to be paid immediately. The installment mode may be monthly, quarterly, annually, etc. When installment payments are received a proportionate amount of tax is then thereby due during the given year they receive said installment payments. Each installment payment may contain proportionate principle, cost basis, capital gains, depreciation recapture, and income tax as it related to the asset of origin. The “Bargain” portion of the transaction is the amount donated to the charity. Hence, the Charitable Bargain Installment Sale. The CBIS is a the best choice for those that desire a hire level of income stream - provides more than the CRAT, CRUT or Charitable Gift Annuity due to the donor/seller able to select the term and receive a proportionate amount of principle back in each installment payment.

The typical donor/seller:

• Has an asset that wishes to sell and wants a safe, fixed return. Must be over 21 years of age.
• Wants to time the gift to his or her tax situation and/or needs over time. Not tied to age.
• Desires to receive their funds in fixed installment payments over a fixed term the decide on.
• Wants to give and sell now, but does not need or want the entire amount at one time.

Gifts features and benefits:

• Gift tax deduction based the Bargain pledged. NISS Tax Attorneys provide this calculation.
• Allows one to be charitable and restructure an asset into an income stream over time.
• Helps those that want to sell appreciated assets but do not need the entire amount of funds at one time.
• Creates asset protection on amount that has yet to be received.