how our taxes are calculated?
(Total gross income) - (Deductions) = (Taxable income)
Using (Taxable income) and according to filing status determined (Tax liability)
(Tax liability) - (Tax credits) = (Tax owned or Tax refund)
how donation of your show horse to a college will affect your tax situation?
Such donation is classified as charitable contribution and is included into (Deductions).
how much would you deduct?
assuming you purchase the show horse and because you hold it less than a year - the amount of your deduction is whatever you paid for the show horse or the amount the house is appraised - whatever is less.
what kind of official paperwork do I need?
You will report the deductible charitable contribution on the schedule A - http://www.irs.gov/pub/irs-pdf/f1040sab.pdf line 17 and in additional you need to attach the form 8283 - http://www.irs.gov/pub/irs-pdf/f8283.pdf
For your record - not to be sent to the IRS you need:
-- supporting documents what you paid for the horse - canceled check, receipt, purchase contract, property tax record, etc.
-- you must get and keep a receipt from the charitable organization showing:
-- -- The name of the charitable organization,
-- -- The date and location of the charitable contribution, and
-- -- A reasonably detailed description of the property.
-- If you claim a deduction of over $5,000 for a charitable contribution - you must also obtain a qualified written appraisal of the donated property from a qualified appraiser.
The appraisal must be made not earlier than 60 days before the date you contribute the property. You must receive the appraisal before the due date (including extensions) of the return on which you first claim a deduction for the property.
Is an official equine appraiser the person for this or just a professional trainer?
The appraisal must be made by a qualified appraiser (as defined on page 6) in accordance with generally accepted appraisal standards. It also must meet the relevant requirements of Regulations section 1.170A-13(c)(3) and Notice 2006-96. Notice 2006-96, 2006-46 I.R.B. 902, is available at www.irs.gov/irb/2006-46_IRB/ar13.html.
Who decides this to comply with it being a tax write off?
You are as a tax payer is responsible to make such decision, and calculate amount of deduction and your tax liability.
How much do I get back? Is this based on my income or is there some level of a donation you get back?
Your refund is based on your overall tax situation. Your refund is not determined only based on your charitable contribution. Generally - your tax return should be filled to determine the amount of your refund. To estimate your refund - we may use a tax calculator - for instance - http://www.hrblock.com/taxes/tax_calculators/index.html
Let me know if you need any help with reporting.