wrote:

- quote -

I can understand why the value to a purchaser goes up
because of dealer prep and any warrantee the dealer might
offer. But why is the vehicle's value affected by the
dealer's advertising and business overhead?

Seth

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Cathy wrote:

- quote -

Sounds like "related use." That is not the same as when
donated items are auctioned within 2 years of the gift.
Slightly different rules apply.

- quote -

Charities are not responsible for valuation of the donation.
You can probably ignore that element of their
acknowledgement letter.

- quote -

That is going to come down to your judgment regarding the
condition of the vehicle donated.

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"Cathy" wrote:

- quote -

Every time I looked at online appraisal calcs, the private
sale value is about mid-way between retail and trade-in.
Above implies -0- trade-in value?? Private sale value
arguably should be used, under the definition of FMV, though
I don't think IRS has formally said so. But I recall one web
site of a charity accepting car donations which said that's
what you use. Being against its own interests, it's
possible they found what they felt is actual authority for
that. www.savvyseth.com says that too, but that site don't
say who Savvy Seth is. Try www.edmunds.com for possibly
better private party value.

- quote -

I don't see the need for a corrected acknowledgment. IRS
Pub 1771 tells these orgs not to value non-cash donations.
Supposed to be a conflict of interest, I think.

Reg,
Fred F.

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chtax[at]cebridge.net (Cathy) writes:

- quote -

I'm assuming that this was a 2004 donation, so what the
charity did with the vehicle is irrelevant. If the FMV was
$5060, then take the $5000 deduction and don't worry about
it. I see no need to get a revised acknowledgement.

Phil Marti
Clarksburg, MD

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Cathy wrote:

- quote -

Use the PRIVATE PARTY value, with appropriate adjustments
for mileage and condition. The KBB RETAIL value is the price
you would pay a dealer for such a car, and assumes that the
dealer has invested money in preparing the car for sale,
advertising, and business overhead.

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A client has donated a vehicle to a charity. The charity in
turn gave it to a family they were helping during this past
Christmas season. It was NOT sold as most vehicles are that
charities receive. The charity actually gave the vehicle to
a family in need.

My question is, which value should be used for the value of
the vehicle? The private party value is around $2,500 and
the retail value is slightly over $5,000.

The charity sent an acknowledgment with a printout from the
Kelly Blue Book website showing the retail value is $5,060.
There was no appraisal for the vehicle so would like to keep
the deduction under $5,000.

The client can get a corrected acknowlegment from the
charity--that is not a problem.

I was surprised to find such a discrepancy in the values.

Any insight would be most helpful.

Thanks
Cathy H.
Ellsworth, KS

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