"Nan, EA in LA" <naneklund[at]aol.com> wrote

- quote -

Yup, it's a charitable deduction. Limited to the $800
(although the educational value is priceless).

--
Paul Thomas, CPA
paulthomascpapc[at]bellsouth.net

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"rick++" <rick303[at]hotmail.com> wrote:

- quote -

In terms of fair market value you're right. But there is a
separate wholesale market that is generally open only to
dealers, where the prices are generally 40-60% of the retain
value.

Stu

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Harlan - sorry but I goofed on the signature. Automatically
used the diabetic group signature, not the tax preparer
signature! Only a month and a half to go........I THINK
I'll survive!

And I think I am going to list the car up in the "cash" area
and explain only if it's ever questioned. It's legtimate
and I won't allow an inflated value.

Nan, EA in LA
(and also Type 2, non-injecting thank God, diabetic.)

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Actually Kellys give THREE quotes now:
trade-in (wholesale)
direct-party (want ad)
dealer (retail)

The second is probably the most accurate.

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- quote -

Assuming the school is tax-exempt, that means the car is
being used for its (the school's) tax-exempt purpose.
Therefore, the deduction amount is the car's fair market
value, subject to getting all the paperwork in order.

Seth

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Nan, EA in LA wrote:

- quote -

Well then, why even describe the donation AS a vehicle? why
not put down "assorted auto parts"?

And btw, what is "type 2?"
I've heard of A and B, but not "types".

ChEAr$,
Harlan Lunsford, EA n LA

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Stuart A. Bronstein wrote:
- quote -

Ah then. I thought the "blue book" was retail, while the
"red book" was the wholesale values.

ChEAr$,
Harlan Lunsford, EA n LA

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Harlan Lunsford <hlunsford[at]bellsouth.net> wrote:
- quote -

There are actually different blue books for wholesale and
retail. Perhaps the dealer was offering wholesale bluebook.
Retail bluebook could be $1500.

Stu

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Problem is - the school has no intention of selling the car.
Nor buying it. The mechanics class is going to demolish
it, put it back together, get it running if possible, and
then take it apart again.

Nan, Type 2

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I can tell you first hand from experience that you will have
a problem deducting this car. I had a similar situation
with another client. As of Jan. 1, 2005 if you donate a car
your deduction is limited to the gross proceeds from its
sale by the organization. The rule applies if the claimed
value of the donated vehicle is more than $500. If the
claimed value is more the $500, you must have a written
acknowledgement of your donation from the organization and
you must attach it to the return. I tried to send in a
return with a deduction for a car via sch. A and form 8283
and it was rejected because form 8283 will have a check box
for cars over $500 if this checkbox is marked you can not
file the return electronically because you need to attach
the written acknowledgement to the return and send it in by
mail. I think that the IRS has recently set some new
guidelines where the qualified organization must issue some
type of form similar to a 1098 or 1099 when a car is donated
with the value of the sale of the car on the form. You
might try to deducted the car with a value of $499. Hope
this helps.

Good luck.

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Nan, EA in LA wrote:

- quote -

Assuming this is not a for profit private high school then
the teacher can deduct the FMV of the auto donated as this
falls under the rule of a charity intending to make
significant intervening use of or materially improving the
car.

Per IRS instructions:

You must get a contemporaneous written acknowledgment from
the charity and attach it to your income tax return, Form
1040. If you do not have an acknowledgment, you cannot
deduct your contribution. If the claimed value of the car is
more than $500, the acknowledgment must include: - your
name and taxpayer identification number,
- the vehicle identification number, and a statement
certifying that the car was sold in an arm's length
transaction between unrelated parties, the gross proceeds
received from the sale, and a statement that your deduction
may not be more than the gross proceeds from the sale, or if
the charity intends a significant intervening use, a
statement certifying the intended use, the duration of that
use, and that the charity will not sell the car before
completion of that use, or if the charity intends to make a
material improvement to the car, a statement certifying the
intended material improvement and that the charity will not
sell the car before completion of the improvement.

You must obtain the acknowledgment no later than 30 days
after the date the charity sells the car, or 30 days from
the date of the contribution if the charity intends to make
significant intervening use of or materially improve the
car.

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Nan, EA in LA wrote:

- quote -

My question is..... If blue book value is 800$ (and that
assumes that it is in at least average running condition),
and (assuming) the car dealer knew the car was not in
running condition, why did he offer her 800$.

Like Clinton said, "it depends on how you define 'is'", as
in "is running" or not.

My point is that if 800 is the fmv of a running vehicle,
then it was certainly worth less: 800 minus the cost to get
it running.

ChEAr$,
Harlan Lunsford, EA n LA

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"Nan, EA in LA" <naneklund[at]aol.com> wrote:

- quote -

Why not? It sounds like one to me. In fact, since it's
being used in the school's "program," she gets FMV deduction
rather than having to go with what they sold it for.

--
Phil Marti
Clarksburg, MD

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A high school teacher donated her old car to the auto
mechanics class in her school. It didn't run; Blue Book
value about $800; car dealer offered about $800. However,
her school will NOT sell it; they will tear it apart, put it
together, harvest parts, and in general, appreciate it.

I think I could take it as a donation to her school - or
could I? She can easily get a letter from the department,
but it really doesn't fit the usual charitable deduction.

Nan, EA in LA

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