If you donate to charity former business property (such as a copier) that is fully depreciated and converted to personal use, would you use fair market value? If you have to use basis would there be no deduction allowed because it was fully depreciated?
-
-
Correct...................... -
TTB, page 4-16, "Ordinary income property. Deduction equals FMV minus the amount that would be ordinary income or short-term capital gain if the property were sold. Examples include inventory...."
If the property is subject to depreciation recapture at ordinary income rates, the FMV is reduced by the amount that would have been included in depreciation recapture.
Thus, if FMV is less than total depreciation claimed, you would have a zero contribution amount. But if FMV were greater than depreciation recapture, then you would have a contribution amount equal to the difference.Comment
Comment