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Ask Lane Your Own Question
Category: Tax
Satisfied Customers: 12025
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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Taxpayer won $10,000 boat in auction now wants to donate to

Customer Question

taxpayer won $10,000 boat in auction now wants to donate to charity at fmv whats his deduction/basis
Submitted: 1 year ago.
Category: Tax
Expert:  Lane replied 1 year ago.
Hi,...Just to cover the bases (may be stating the obvious) To be deductible, you must make charitable contributions to qualified organizations.... If you claim a deduction for a contribution of non-cash property worth more than $5,000, you will need a qualified appraisal of the non-cash property and must fill out Form 8283, Section B - but the appraisal is not attached to the return. Sending in appraisal with return is only required for donations of over $500,000...Fair market value IS the basis for the donation ... and in IRS Pub 561 under Cars, Boats, and Aircraft it states: "Boats. Except for inexpensive small boats, the valuation of boats should be based on an appraisal by a marine surveyor because the physical condition is so critical to the value."...IRS defines Fair Market Value this way: "Fair market value. Fair market value (FMV) is the price that property would sell for on the open market. It is the price that would be agreed on between a willing buyer and a willing seller, with neither being required to act, and both having reasonable knowledge of the relevant facts. If you put a restriction on the use of property you donate, the FMV must reflect that restriction."...And then, in terms of limitations, you see from here: ..."You may deduct charitable contributions of money or property made to qualified organizations if you itemize your deductions. Generally, you may deduct up to 50 percent of your adjusted gross income, but 20 percent and 30 percent limitations apply in some cases. Exempt Organizations Select Check uses deductibility status codes to identify these limitations"
Expert:  Lane replied 1 year ago.
Please let me know if you have any questions at all....If this HAS helped, and you DON’T have other questions … I'd appreciate a positive rating (using the faces or stars on your screen, and then clicking “submit”)…I receive no crediting at all unless you rate in this way....Thank you!Lane……I hold a law degree (JD, Juris Doctorate), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in finance & tax, as well as CFP® and CRPS designations. - I’ve been providing financial, Social Security/Medicare, estate, corporate, both for-profit and non-profit, and tax advice, since 1986
Expert:  Lane replied 1 year ago.
Did you see the answer? Tried to give you everything you'd need ... but the answer is that his deduction "basis," if I've understood your question is Fair Market Value ... and at 10K you need an appraisal for client's records....Have I understood your question correctly?
Expert:  Lane replied 1 year ago.
Hi,...I’m just checking back in to see how things are going...Did my answer help?...Let me know…...Thanks,Lane…