Donation of worthless/toxic assets: How does this scam work?
I received the following spam email (I redacted identifying information to avoid boosting their Google results):
We are a 501(c)(3) non-profit organization designed to help other
companies increase their income. There is NO cost to you or your
company. We simply do something you don't and pay you 0 in the
process.
We are designed to accept donations of worthless real estate,
timeshares, and mortgages that can't be sold, have no value, and are
generally declined when offered. We assume all liability and work
processing and pay you 0 at the end. While waiting for document
recording all funds are held by an escrow company to protect you, the
client and us.
If you wish to check us out go to the IRS website,
apps.irs.gov/app/eos/ and enter our EIN: [redacted].
For details please go to [redacted]. You can read our details at
[redacted].
To stop receiving these emails simply reply to this message with
UNSUBSCRIBE in the subject line.
[redacted]
Obviously, this isn't legitimate, or they wouldn't be advertising it via spam. Also, paying for assets that have negative value isn't compatible with staying afloat. So what's really going on here? What would happen if someone accepted this scammer's offer?
(1)1 Comments
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I think the game here is expressed in this paragraph from the website:
A charity is like any other business, it has to operate on a cash
basis. If it accepts a donation of a non-cash item, it must convert it
to cash by selling it to derive income to pay their bills. Many people
think their donation automatically has value to a charity. It is
important that you understand up front that we do not have a magic
ability to convert minimal value properties into cash so the donation
is of no value to us. Yet a donation can create a very real cash
amount for the donor regardless of it's lack of value on the open
market. We do charge for our services but we try to make it a
reasonable cost based on the cash amount the donor can gain from the
donation credit.
If I follow this correctly the donor gives the charity:
title to an undesirable asset, typically real estate or a time share
a donation for the charities time and expenses to liquidate that property
The charity then holds and liquidates the asset. The charity keeps
both the donation and the asset. The donor then is able to write off
the sum of the donation and asset as the entire donation.
Who would want to use us? Consider these situations.
Vacant lots in depressed areas.
Damaged structure not worth repairing, especially after receiving insurance proceeds.
Squatter occupied property that is to much trouble to try to recover and get fixed back up.
Legally restricted property such as zoning, non-access locked, environmental disasters, and remainders of eminent domain seizures.
Lease locked property not returning a profit.
Any property for any reason that can't be sold for more than ,000 quickly and easily.
The charitable aspect here seems to be that the charity helps homeowners who are not otherwise real estate gurus dispose of difficult properties. This is odd in that the donor to the charity is also the recipient of the charitable giving.
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