Business Auto Donation

[S T]

Have a Schedule C business client that donated a business vehicle on 12/22/06.

Still had unrecovered basis of $ 1042 which is approx 8% personal use.

As of 2/5/07 still has not received a statement from the charitable organization as the vehicle had not been sold.

So how to handle for 2006 taxes???

Sandy

[Kram BergGold]

auto

Recently a client told me the charity informed him that he would only get a 1098-C if the car's value was over $500. So maybe you should assume that the value was under $500.
The deduction in your case is limited the the FMV of 8% of the car. So basically $40 (8% of $500). You can't take a charitable contribution on the business part that has been depreciated to zero.

[jainen]

can't file that return yet

>>Schedule C business client that donated a business vehicle<<

Schedule C can not make a charitable contribution. First you have to convert it to personal use, which triggers recapture of Section 179 and excess depreciation. Then you can donate at lower of adjusted basis or FMV (sale price). They have 60 days to sell it, so you can't file that return yet.