11 Comments

1. 

   You paid 8% of the MSRP? Was it stolen? Dont answer that, I dont want to be an accessory to the crime.

   I personally would write off the MSRP.

   Comment by Heisenberg — August 29, 2006 @ 9:03 pm

2. 

   You won’t be able to claim crap you bought the stuff in a parking lot lol

   Comment by JDstinger — August 30, 2006 @ 5:59 pm

3. 

   sell it to me instead.

   Comment by MC Signal — September 2, 2006 @ 9:01 am

4. 

   Purchase price only.

   And then you’d have tp pay tax on the market value and also the taxable portion for the donation.

   Tax advice: Don’t donate it.

   Just chuck it out at their front door.

   Comment by Bene Esse — September 2, 2006 @ 9:36 am

5. 

   You cannot value it at more than you paid, no matter what the MSRP says. If you do and you’re audited, and cannot produce a receipt, you can be charged with committing fraud against the IRS. This is not something worth the increased deduction.

   Comment by Maryn Bittner — September 5, 2006 @ 6:07 pm

6. 

   The most you can donate is what you paid for it, so $200. If it’s fair market value at the time you donate it is at least $200, then you could deduct $200. If the FMV is less when you donate it, then your deduction is the FMV at that time.

   Comment by Judy — September 7, 2006 @ 2:59 pm

7. 

   The lower of 1) what you paid or 2) the Fair Market Value. The FMV is what you could expect to sell it to somebody knowledgable about the product who is not under duress to make the purchase. In other words, what could you sell it for at a garage sale.

   So $200 unless you don’t think you could get that much at a garage sale. Also, I hope you got a receipt from the seller and kept it so you are ready in case of an audit.

   In other words, don’t deduct it.

   Comment by Bob F — September 9, 2006 @ 11:02 pm

8. 

   Stick with the $200 buddy. You could most likely get away with claiming $2500 for a donation to charity on your taxes, and I am 99.9% sure you would NOT get audited (they don’t mess with small crap like that - they don’t have time) - but to be on the safe side, legally, you can only claim what you have record of paying for it! Sorry for the bad news.

   Comment by Cal M — September 12, 2006 @ 6:33 pm

9. 

   $2500 was probably what it was worth new, to claim it as a deduction you need to calculate fair market value if it is used.

   Comment by Jerry J — September 16, 2006 @ 12:15 am

10. 

    Excellent question!

    First, some background. When you buy personal property (sterio, car, toy, motorcycle), and then sell it for more that what you have into it, you must declare this on your tax return as capital gains on Schedule D. When you sell for a loss, the loss is not entered on your tax return. Sound fair? Nope. You pay tax on gain but get no credit on loss. It’s the law, unfortunately.

    So, if you bought a sterio for $250 and put another $250 into it (repair, parts, etc.), then sell it for $600, you would have a capital gain of $100. If you sold it for $400, you would have no capital gain or loss to report.

    If you owned the sterio for more than a year, the gain would be considered long-term. Otherwise, it would be short term.

    When you donate personal property (such as a sterio) to a charitable organization, normally you would simply deduct whatever its “fair market value” would be. To calculate the fair market value, you must figure out how much you could get for it by selling it (eBay, garage sale, pawn shop, etc.). When you donate personal property that has a fair market value MORE than what you paid for it, the tax laws get complicated. If you’ve owned the property for one year or less, then you can only claim what you paid for it. So, in your case, if you bought the theatre system for $200 in January and donate it the following July, then the most you can claim is $200. If you hold it for more than a year before selling it, then in general, you can claim the fair market value. There are a few exceptions, but I doubt they would apply in your case.

    Record keeping:

    If the item is less than $250, you need the name of the org, address, date, and a reasonable description of the item. You should also have what you paid for the item and what you are going to claim for a deduction.

    If it is between $250 and $500, in addition, you need a written acknowledgment from the org.

    If it is between $500 and $5000, in addition, you’ll need to say how you got the property (gift, purchase, etc.) the date you got it, and what you paid.

    If it is $5000 or over, in addition to the above, you will need a qualified written appraisal (which doesn’t hurt even if the value is less than $5000).

    In your situation, if you can sell the property for a nice profit, I would do just that. Don’t forget to claim the gains on Schedule D of your 2008 tax return. If you are feeling charitable, you can donate some of your profit to your favorite charity. If you suspect the item was stolen, you must report it to the proper authorities without delay. If you insist on donating it to a charity, wait until you’ve owned it for over a year, get it apraised (just to be safe), and then donate it. Don’t send the apraisal to the IRS, but, keep it with your records in case you are audited.

    Good luck!

    Comment by TaxMan — September 17, 2006 @ 4:11 am

11. 

    $200 minus depreciation - 1/5th for each yr you owned it - if it’s 5 yrs old - nothing

    Comment by Doctor Deth — September 18, 2006 @ 10:40 pm

RSS feed for comments on this post.

Sorry, the comment form is closed at this time.