Equipment donation valuations

Assign the value at what you think it should be worth, given the evidence you've assembled. The chances of getting audited are about zero and you'll have reasonable backup in the miniscule chance you are. The worst case is that you'll have to pay the tax and a small penalty. Your documentation is a demonstration that there isn't any fraud so there is very little to worry about.

Fair makes no sense in the real world. If the equipment is current enough to be sold by the professional resellers, that would be the best place to get a number. It is hard for IRS to dispute those numbers if you can show a date on them.

eBay may or may not be a good place to get numbers. The question is what does the IRS consider...

What you call "insane" is fair market value for "professional" buyers. Hard to argue with that. They are making a living selling at those "insane" prices. If they have any additional service like calibration or guarantee, they will clearly indicate, often right on the price page. They usually don't include *any* accessories including any cables or probes that are necessary to use the gear. So be sure to add in for that.

If you have a laptop I might be interested in buying. I'd love to have one running a FOSS OS.

(snip)

The "if" is important, but I probably agree.

But there are plenty pricing things high, not expecting to sell, but if they do, to make a big profit. Mostly that is for not so current equipment.

That is probably what I would use, but it depends a lot on what the item is.

I believe that there are written explanations from the IRS.

There are some things that are getting rare, more like antiques.

If you have records for ones having sold, then it should be reasonable to use those prices.

is a transmission densitometer. That is some fairly fancy electronics, including a photomultiplier tube, regulated power supplies, and such.

But no testing and no guarantee. One would need to calibrate it to use it. There might be important parts missing.

But for $10 how much can you lose? ($10)

Used, tested, and calibrated, they might be $200 or so. New, might be $2000.

Well, I have known eBay sellers to put a very high price when they are sold out, instead of removing the listing, and adding it back later. That is one cause for insane prices.

Others are hoping for a desperate buyer, trying to keep some old system running. They may have hundreds of items listed, and will be happy if one sells.

is a MicroVAX for $695 plus $58 shipping. It has been there for many months, and not sold. I suspect it won't sell for that price, but someone may just want one, and not care about the price.

Most often, I can consider a price that I might reasonably want to pay for something.

-- glen

Publication 526 Cat. No. 15050A Charitable Contributions Section on contributions of property.

Some organizations publish a "value guide" which is generally acceptable by the IRS.

That's what I've been doing. Everything I donate gets priced on eBay "sold" listings. However, there's a catch, which happened to me. Suppose you donate a vehicle that the dealer values at $800 for a trade-in. The recipient of the donation later unloads the car for $200, well below fair market value. The IRS considers the $200 to be the deductable amount, not the "fair market value". Note that the rules change at $500 value, and again at $5000 value.

Some do, some don't. It all depends on how greedy or desperate they are. I've made offers for overpriced test equipment to such dealers and sometimes gotten it at my price.

It's precisely the IRS Regs - recipients are NOT allowed to set a value on the items, due to past abuses with inflated values. Thus, the recipient says "we got this item" and you need to be able to justify the value you use for it to the IRS if they come calling.

If you have provided uncalibrated (as in, not recently, or due for recalibration) gear with no warrantee, the ebay "sold" pricing might be the better supported value, at least as opposed to calibrated gear with a warranty from the expensive vendors. If you feel you can support it, the two set a range. Or have a professional appraiser appraise the stuff, and support it that way. Mostly, try not to be too far "out there" and the IRS may not come calling - but hold on to your documentation for (seven?) years, just in case.

It varies depending filing status, type of business, type of records, and which way the wind is blowing: State tax record keeping requirements also vary. I keep everything for about 8-10 years and forever for years where I have a major event (sale of business, major stock transactions, large bad debt, etc).

A fair price is somewhere between what the used equipment place will offer you for the equipment and what they will then put it on sale for. they basically want you to put a number on how much you lost by donating it.

Search completed listings on eBay.

Cheers

Phil Hobbs

How well you need to research the values kind of depends on how much stuff you are giving. A off the top of your head value is okay if you are not claiming thousands of dollars. If you claim a value of $1000 and the IRS g uy thinks it is really only worth $600, then he has to think is it worth th e time and aggravation to argue with you. If he does argue and win your d eduction would be $400 less and if you pay taxes at say 25% then he has inc reased your tax by $100. And so it had better not have taken him more tha n an hour. Because some times he will not win. And his salary and benefit s combined is probably over $100 an hour.

Dan

Contact the IRS or that makes you nervous have an account contact the IRS looking for guidance. That contact documented will at least put you in a position of both no fraud intended and you did what you believe what was required.

I used to have an account that regularly contacted Revenue Canada (Canadian IRS) simultaneously with 2 or 3 accountants with the same question used the answer they liked and found that the worst that would happen was some tax would be payable and no penalties.

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