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Community Health Training, Inc.
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low cost health care information to both professionals and the public
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CHT, Inc.
Las Vegas, NV

Mortgage Donations

New Donation Oppertunity

We are now accepting donations of mortgages and bad debt notes. We will accept any mortgage or bad debt donation in any condition regardless of it's payment history.

If you have a non-performing mortgage that has reached a point of write-off let us show you how you can still make more money faster by donating it to us.

We are far different than other charities.
We don't care if you think it's worthless.
We can still make it worth your while to donate it.
Writing off a bad debt can be 5x faster through donation.
Donating a bad debt can be worth 6x more than a normal IRS Write Off.

We have made special arrangements to process donations of mortgages, deeds of trust, and promissory notes secured by real estate to them.
(To keep things simple we will call them all mortgages.)

This is a unique situation and NOT advisable to all situations.

If you own a mortgage you can dispose of it by:

  1. Release when paid in full
  2. Sale (usually at a discount)
  3. Exchange for other property
  4. Release in lieu of foreclosure
  5. Gift to another party
  6. Donate the mortgage to a charity
  7. Write it off as a bad debt
  8. Abandonment

We are going to address ONLY the last three where we feel if you donate a mortgage, it's the best option for you. If it's a non-paying asset consider donating you mortgage versus option 7 or 8. As a donation it can be worth more to you than simply doing an IRS bad debt write off.

If you want IRS text click here            Submit the online form

First, Abandonment is easiest. Just trash it. You get nothing at all in return.

Second, write off of a bad debt will get you some cash back but it is lengthy and complicated. You can write off a maximum of $3,000 per year until the total is written off as a bad debt. A $60,000 mortgage will take 20 years to write off. You will get a tax savings or return (Uncle Sam paying you for the loss) based on the current tax bracket you're in each year so long as you continue to file for the bad debt write off. If you're in a 33% for the next 5 years and then retire to a 15% tax bracket you get paid $990 for 5 years and then $450 for the next 15 years.

Third, if you donate your mortgage you'll get the same cash back as option 7 but much faster. The IRS rule says no more than 50% of your adjusted gross income can be a donation deduction. If your adjusted gross income is $60,000 you can write off $30,000 for two years. At 33% on $30,000 the IRS pays you $9,900 each year for two years as an incentive to donate your mortgage and then you're done.

If you want IRS text click here            Submit the online form

There are two catches to donating a mortgage.

  • First, will a charity accept your bad debt?
  • Second, will the IRS ask for an appraisal on the write off?

A charity accepts mortgage donations they can turn into cash. If they can't, they won't accept the bad debt. After all, if you can't, why would you think they can? If they do accept the mortgage donation you have to worry about the Three Year Rule. The IRS says that if the charity ". . . within three years sells, exchanges, or disposes of the property, the organization must file Form 8282, Donee Information Return." within 125 days or the charity faces penalties. This form notifies the IRS that they should expect an amended return from you to reduce your deduction to what cash was actually received for the mortgage donation. If they give you $60,000 mortgage donation credit and can't collect a dime so they sell it to a speculator for $100 you have to change your mortgage donation deduction downward and pay back any taxes you had gotten based on it. Make sure you know what the charity will do when you donate a mortgage.

The second concern is that the IRS states that the charity can give you credit for any amount, but it's up to you to claim the amount of the mortgage deduction. If the amount you claim is more than $10,000 they can ask you for an appraisal from a professional they will accept (CPA, banker, investment broker, etc. that is authorized to deal with mortgages, trust deeds, promissory notes, stocks, bonds, etc.). That appraiser is required to make a valuation based on the sale price of your specific mortgage if it is sold, exchanged or disposed of. If you donate your mortgage and it's NOT later transferred the appraisal must be based on similar instruments actually sold or disposed of in an open market situation. It's up to the appraiser to find his or her own comparables. The appraiser will ask but you don’t have to show any payment history to the appraiser. All you have to do is give the appraiser a copy of the original mortgage document, not any specific payment history. Because it is based on actual sales, worthless mortgages that became bad debt write offs are not included in the analysis.

Here’s how to deal with this issue. It’s up to you what you deduct. If you believe a different sound, stable viable debt instrument similar to yours but still being paid would be well worth more than the $10,000 limit, have an appraiser do their thing and take that amount as the actual deduction. For example, the appraiser says 5 similar mortgages close to $60,000 with the same interest rate and terms sold for an average of $52,000. Claim $52,000 as your mortgage donation deduction. You’ll have the appraisal when the IRS asks for it.

To place a value on your decision take the tax bracket you’re in and multiply it by $10,000. This is how many dollars the IRS will return to you or credit you on your taxes without any questions at all.


For larger face values, compare how much you’ll get back over time. First, divide the face value of the mortgage by $3,000 for one number and by 30% of your adjusted gross income for the second number. This will show you how long each will take to complete. The amount you get is always based on the tax bracket you’re in so the number of dollars is not as important as how fast it’s completed.

Ask yourself this, "Is it better to get a lot more money in a short time or
take up to ten times as long to try to squeeze every possible dime out of it?"

If you want IRS text click here            Submit the online form

* * * * * * *

The only NPO we are aware of that will accept a mortgage donation that has
NOT proven itself valuable enough to hold for three years is
Community Health Training, Inc., which has a proven record of holding
donated properties longer than the 36 month requirement.

The fee for processing is $1,000.
This will be placed with an escrow company
for return to you if we fail to complete the paperwork.
Once completed all IRS documents will be provided to the donor.
An appraisal will NOT be supplied by us.

If you want IRS text click here            Submit the online form


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