Discussion:CHARITY CONTRIBUTION OF OTHER PROPERTY
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Discussion Forum Index --> Tax Questions --> CHARITY CONTRIBUTION OF OTHER PROPERTY
| 17 July 2007 | |
| My client is about to get ahold for free of 20 new bikes. He wants to donate this to a 501c3 and the appraised value will be more than $5k for each bike. His basis is zero bec he got them for free. How much of a charity deduction could he take? | |
Bottom Line (talk|edits) said: | 17 July 2007 |
| Zero. He didn't pay anything for them. | |
| 17 July 2007 | |
| But he if he goes and buys them at an auction for $1k a piece, cant he make an argument that he got a steal and then deduct the FMV/appraised value at the time of doantion some 3-4 months later? | |
Death&Taxes (talk|edits) said: | 17 July 2007 |
| Agreed, but if he keeps the bicycles a year? | |
| 17 July 2007 | |
| My question is how did he "get ahold" of these bikes for free? That will give us a better idea of the nature of this bikes to the shareholder. The contribution deduction for personal property that would generate long term capital gain if sold is that FMV of that property. their are limits ie: 30% of AGI, and the charity must use the property not sell it. | |
| 17 July 2007 | |
| Whoa, I just reread the original post 20 bikes * $5,000 = $100,000 and he is getting them for "free"????? | |
| July 17, 2007 | |
| No costs of hijacking the truck? Repainting. Storage. Changing VIN's and retitling in Arkansas? | |
| 17 July 2007 | |
| JR that is started to sound like this a trade or business which would make the bikes inventory so the deuction would be limited to basis. Would the ski masks be capitalized or currently deductible as uniforms expense? | |
Death&Taxes (talk|edits) said: | 17 July 2007 |
| Good pickup Tony! Perhaps I missed the headline about 20 riders being thrown out of the Tour de France because of failed drug tests. | |
| July 17, 2007 | |
| Rolling on the floor laughing, spitting coffee everywhere! So, assuming this guy's French, are there US tax issues? | |
Death&Taxes (talk|edits) said: | 17 July 2007 |
| Hey, JR. Last year's winner was that American who was then disqualified for failing the drug test, and is still fighting the matter in one court or another. | |
| 17 July 2007 | |
| Hey guys:
AAA was to open up a pedacycle joint in Miami and attain the proper licenses to do so. At the end AAA bought the bikes at $5k a piece and put them in storage. He was subsequently NOT successful in getting the locals to grant him permission to open shop. AAA decided that he will either let them sit in storage and let his friend BBB buy them from the storage place for whatever the auction goes for or gift his 'worthless' inventory straight to BBB. BBB is thinking that he would want to take advantage of this new windfall of cycles and DONATE them to a local 501c3. BBB wants to take a deduction based upon a supported FMV appraisal although his basis almost nothing bec he got it for free or maybe $300 per bike bec he bought it for that price from the auction. 'The bottom line q' is , is whether we can structure BBB's play to yield him or his 'business' a $100k charity deduction?' | |
| July 17, 2007 | |
| So now the fun's over? Geez, you didn't have to blow the whistle so soon, we were having a good time here. I don't see how you can do what they'd like to do. They're inventory to AAA, let's call him A for short. He can't gift them to BBB, who we'll call B for short, without filing a gift tax return and using lifetime exemption due to the amount. And that still keeps the basis to B as the purchase price, not the FMV. | |
| 17 July 2007 | |
| You may want to look at these older threads:
http://www.taxalmanac.org/index.php/Discussion:Donations... http://www.taxalmanac.org/index.php/Discussion:Sports_Cards_Donation_Deductions | |
| 18 July 2007 | |
| I guess with the price of gas, AAA (American Automobile Association) is giving up on cars and will now deal with bikes? | |
Bottom Line (talk|edits) said: | 19 July 2007 |
| Why doesn't AAA give them straight to the charity instead of going through BBB? | |
