cj.green[at]worldnet.att.net (Christopher Green) wrote:
- quote -

I agree, if the car is not drivable, the scrap yard will
charge you to haul it away. They may do it for free, of
course, just to get the scrap metal.

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MTW wrote:

- quote -

Kelly, Edmonds, etc., have what used to be called "red
book", now called "wholesale blue book", which is an
estimate of what a dealer would pay for the car. (In coin
collecting, the "blue books" are still blue and the "red
books" are still red.)

Although a dealer would often pay less than a private party,
because he'd have to certify the car for resale, some point
between "red book" (for the condition of the car) and "blue
book" seems reasonable for FMV.

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"Arthur L. Rubin" <ronnirubin[at]sprintmail.com> wrote:
- quote -

[snip]
- quote -

Not always. If you have a car for which there is no market
or a glutted market for scrap parts, scrap yards may not
want it at any price.

--
Chris Green

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MTW wrote:

- quote -

Since you mention used car values, I can comment since I
just bought a new car and have this ten year old Saturn.
For y'alls' information (plural possessive) try Edmonds.com
next time you need values, either for yourself or a client.
You input several factors, including condition, mileage,
year, model, even the colour of the car (would you believe
blue subtracts 2-5$?) and are rewarded with three figures:
trade in (which you could only hope for of course),
private party sale, and best (highest) a dealer might
obtain. Interesting figures.

And in a previous thread we were talking about donating
surplus cars. I said I would probably keep mine, since I
could park it side of house and have a "spare", instead of
having to get shut of it and I will. (remember someone
suggested a good reason for donating or selling instead of
keeping and that was space limitations in the city.)

Hmmm... nothing like the smell of new leather!

ChEAr$,
Harlan Lunsford, EA n LA

Ah Helen; remember that smell in Biloxi at the airport?

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Christopher Green wrote:

- quote -

But I'm not sure the IRS agrees with that. The dealer blue
book values presumably include the value of additional
services that a dealer might provide, but a private party
normally wouldn't. These services might include financing,
trade-ins, inspections, repairs, limited warrantees,
exchange privileges, etc.

As I recall, the Kelly people have started tracking "private
party" values (I'm not sure where this information comes
from) and I suspect such are more in line with what the IRS
would accept, assuming comparable quality/condition.

MTW

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Christopher Green wrote:

- quote -

....

- quote -

Not really. FMV in a sale to a scrap yard is usually a
couple hundred dollars.

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bmonkey[at]elvis.com (Dave Buck) wrote:
[snip]
- quote -

This is something I've long wondered about. The "FMV" that
people are claiming is deductible is typically full retail
"blue book" value as if the car were in good condition and
sold by a dealer. This may indeed be much greater than the
value a private party could actually realize in a sale.

If I have a car with, say, $5,000 in this kind of fictitious
FMV, but the most I could get for it in a private sale is
$1,000, then the value of the $5,000 deduction may well
exceed the value of selling the car.

Many of the cars donated in this manner are plainly unfit
for private sale or would attract no buyers even if
advertised for a long time. I still believe there is a
defensible argument that the FMV of many such cars is zero,
because that is actually the price that willing buyers would
pay for them.

--
Chris Green

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taxservice[at]aol.compliance (John H. Fisher) wrote:

- quote -

The new Pub 4303 finally acknowledges (though not in much
detail) lies told by charities in, for example,
advertisements that say "Don't sell your car! It may be more
valuable as a tax deduction!" Actually, it's NEVER more
valuable as a tax deduction. If the FMV is $1000 and you
sell it, you get $1000. If you donate it, you get (at most)
a deduction of $1000. Until we have a tax bracket of 100%,
selling is more valuable.

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IR-2004-84, June 29, 2004

NEW PUBLICATIONS FOCUS ON CAR DONATIONS

WASHINGTON - Internal Revenue Service officials today
announced the release of two new publications dealing with
car donations as part of an effort to help taxpayers avoid
potential pitfalls when they donate automobiles to
charities.

The first publication, Publication 4302, "A Charity's Guide
to Car Donations," addresses issues that charities need to
know to properly operate car donation programs. The second
publication, Publication 4303, "A Donor's Guide to Car
Donations," is focused on individuals who make such
donations.

"We want people and the charities to make sure they are
taking the proper steps involving vehicle donations," said
IRS Commissioner Mark W. Everson. "Supporting charitable
activities through tax deductible contributions is an
important element of tax law and serves the national
interest. But we encourage people to proceed carefully when
donating vehicles. There are instances where the donations
may provide little benefit to the charity."

For a taxpayer, the appeal of a car donation is simple:
Unload an old car, help a worthy cause and take advantage of
tax provisions designed to support the generosity of
Americans. Taxpayers who itemize their deductions may be
able to claim a charitable contribution for the cars they
donate to charity. The deduction may not exceed the fair
market value of the car.

In recent years, the number of car donation programs has
increased dramatically. This growth, however, has taken
place without taxpayers and charities always understanding
their obligations under tax law.

Both publications were written in conjunction with state
charity officials, as part of an ongoing effort by state and
federal officials to work together to educate taxpayers and
charities.

Publication 4302, "A Charity's Guide to Car Donations,"
provides descriptions of several different car donation
programs, filing and disclosure requirements for charities
operating these programs and related information. Included
among the description of vehicle donation programs is an
example of an arrangement that would fail to preserve the
deductibility of a contribution.

Publication 4303, "A Donor's Guide to Car Donations,"
reminds taxpayer that they need to make sure they are
donating their vehicle to a qualified organization, receive
a written acknowledgement from the charity, keep records and
properly assess the fair market value of their vehicle.

Both publications are intended to assist individual
taxpayers and those operating car donation programs to
comply with tax law. Both publications are available at
IRS.gov.

-------------------------------------------
Thank you for subscribing to IRS Newswire.

If you have a specific concern about your tax account, call
IRS CUSTOMER SERVICE AT 1-800-829-1040.

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Where Ignorance is bliss, 'tis folly to be wise!=

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