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    sis11038's Avatar
    sis11038 Posts: 1, Reputation: 1
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    #1

    Jan 15, 2010, 12:26 PM
    Should I sell inherited property that has depreciated in value or donate it?
    This rental property was appraised for $60,000. At the time I inherited it. The tenants have totally trashed both apartments, and have been evicted. I am no longer generating income and losing money every month it sits empty. I do not have the resources to repair the damages, and have been offered & $10,000 to sell. Do I have to pay any taxes on the $10,000? I was told I should donated the property to homes for humanity for a deduction of the appraised value. Any advise?
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
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    #2

    Jan 17, 2010, 10:44 PM
    If you sell the property for $10,000, it is likely that you would pay NO taxes on it (as the proceeds would NOT exceed the basis), and probably could deduct the resulting LOSS.

    If you donate the property and use the appraised value for the charitable deduction, the IRS will want to see the appraisal. Further, you KNOW the appraisal is false, because you clearly cannot sell it for $60,000. The IRS could verify these facts by contacting the Homes for Humanity and quickly come to that conclusion.

    Better to sell the property and LEGALLY claim the loss.
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