Donated Burial

[Possi]

My client donated a Mausoleum, casket and inscription to a church and has paperwork stating the FMV as a little under $17k.

She bought it for $11k (around that).

My clients only give away junk they think is worth thousands. This is the first time I've had to deal with anyone giving away something actually WORTH anything!

I read and re-read the rules, and pulled this from TTB:

"Capital gain property. Capital gain property is
property that would generate a long-term capital
gain if sold. Examples include stocks and bonds
held long term, and personal items such as clothes,
furniture, and automobiles. The deduction generally
equals FMV."

Am I reading that right? Would it qualify for taking the FMV? It was given to a church. I have plenty of documentation to back up the deduction.

Thanks!~~

[erchess]

Very Interesting

I would have said limit it to basis but I guess I am wrong. I would say go on and claim FMV.

[Possi]

That's One!

I would have said limit it to basis but I guess I am wrong. I would say go on and claim FMV.

... that's one for a heavy hitter! Thanks, erchess!

do I hear a "second?"

[bgiez]

Don't forget to attach the written appraisal since its FMVis > $5000

[Possi]

Will do!

I'll do that!

[Burke]

... that's one for a heavy hitter! Thanks, erchess!
do I hear a "second?"

I don't have any problem with it being capital gain property. It is a capital asset and they would have to report it as a long-term gain if sold.

[erchess]

Do not confuse

posting frequently and holding strong opinions with actual tax knowledge.

[taxea]

was this donation for one particular body or just to the church with no designation of use?

That would make a difference on whether it is deductible. If it is then I would use the lesser of the cost/fmv.

[ChEAr$]

was this donation for one particular body or just to the church with no designation of use?

That would make a difference on whether it is deductible. If it is then I would use the lesser of the cost/fmv.

Uh... do you mean that if it were for a designated "body", you would only use cost versus fmv?

(grin)

[FEDUKE404]

But it IS worth that, right?

I tend to agree that the donation value would be capped at cost - it might be a bit difficult to come up with a legit value of $17k that would pass all Form 8283 muster with the IRS.

And then I could see a very large waving red flag on that tax return....

Reminds me of a situation a few years ago where a small church actually issued a donation "receipt" to the survivor for the costs of burying a deceased member on their grounds. (Look up the difference between "graveyard" and "cemetery.")

Client (who was executor/son) decided that would not be a wise thing to pursue on his personal taxes.

FE

[Possi]

One particular body?

Well, nobody in particular is dying to use it just now, but someone somewhere will one day use it. There isn't an option to "hang it on the wall of the church," nor is it "on the market" like a used car at Goodwill. She's not waiting for a 1099.

I do not ever wish to visit the local IRS office regarding this, but I do want to give my client every good deduction.

[Burke]

I am curious as to what the church will actually do with it. Maybe sell it at a raffle? How in the world will they decide to whom to give it without incurring favoritism, or other problems? It's not like they can hold services in it for the general congregation. So what good is it to them? If they DO sell it, I think the IRS would want it to be treated like a car is -- deduction would be limited to what they get for it. Interesting hypothesis. Hopefully, it was not intended to be a gift to the minister/pastor/priest.

[Possi]

I don't know

I have no idea what they will do with it..
Her intension was to help someone who couldn't afford to be buried.
What would you do with this?? I really think the deduction is qualified for the FMV, as she would have had to pay gains if she sold it at the appreciated value.
Someone earlier mentioned this waving a big flag. I don't want to do that, but want to do what is right by my client.

[Burke]

If you feel comfortable that it was not donated for the use of a specifically identified person at this particular time, then I would treat it as any other cap gain property. FMV.

[Kram BergGold]

Appraisal

There are rules about the written appraisal. The letter from the Church is not what you need in this case. Look at the back of Form 8283 and/or read the instrucitons.