Use tax Break for Philanthropy

Who does not love paying lower taxes? While cheating on paying taxes is a federal crime, there are ways one can legally lower the amount of taxes paid to the government. 170 Exchange transactions, commonly known as Bargain Sales, are usually used to receive immediate tax savings from the disposition of under-utilized commercial assets. The Welfont Group, a boutique commercial brokerage firm that focuses on acquiring depressed commercial real estate properties, is a seasoned professional when it comes to smoothly executing the 170 Exchange, as approved by the Internal Revenue Code (IRC).


How the Welfont Group Finances the Mercy Foundation’s Micro Loans

In a nutshell, the 170 Exchange allows a property owner to donate his/her property to a non-profit entity that has been formed under the 501©3 rule to receive a “charitable contribution” income tax deduction. A Turbo calculator can easily quantify the deduction. Then the Welfont Group provides micro loans to poor people all over the world through the Mercy Foundation. This way, everybody benefits: the Welfont Group receives its tax deduction, the Mercy Foundation is then able to continue making micro loans, and many needy people living in poverty stricken areas halfway around the globe get to start or expand their small businesses.

Listen to What Experts Say about the 170 Exchange

There might be some people who doubt the legality of the so-called 170 Exchange of Bargain Sales. However, many tax experts insist there is nothing shady about it. Kelly Philips Erb, staff writer for Forbes magazine said, “Donating property that has appreciated in value, like stock, can result in a double benefit. Not only can you deduct the fair market value of the property (so long as you have owned it for at least one year), you avoid paying capital gains tax. Normally, appreciated property is subject to capital gains tax at disposition but there is an exception for donations to charitable organizations.” While many are still unaware of the Bargain Sales, many commercial real estate firms regularly take advantage of the 170 Exchange. According to the Welfont Group, there are over 20,000 real estate bargain sales taking place in the United States every year, reaching a total value of over $ 8 billion. The Welfont Group is confident that it can bridge the distance between various commercial real estate firms and non-profits organizations so that they can mutually benefit each other.

The Effects of the Mercy Foundation’s Micro Loans

As mentioned above, the Mercy Foundation gives out micro loans to the poor so they can create capital and pull themselves out of poverty. Success stories abound, from the Filipino housewife who expanded her rice retail business, to the widowed Peruvian coffee farmer who used the micro loans to pay for fertilizer and extra farm laborers, to the middle aged Nicaraguan woman who was able to offer more in demand products in her small grocery store. Not only have they proven to themselves and society that they do not to continuously depend on donations, but they are actually talented entrepreneurs who can succeed when given the opportunity and help.