Bargain Sales A donor who wants to recover a portion of the value of property that he or she wishes to contribute to charity may consider entering into a bargain-sale transaction with the charity. In effect, a bargain sale is a sale of property to charity for less than its fair-market value. The bargain sale price may be any amount mutually acceptable to the charity and the donor.
Some donors are willing to sell the property for an amount equal to their cost basis.
Then they recover their investment and get a deductible for the appreciated element. The tax law states, however, that the recovered portion cannot be treated wholly as basis, but rather as part basis and part reportable capital gain.