Gift of pontoon boat to charity

[oceanlovin'ea]

I have a new client that came in this morning. They donated a pontoon boat to a religious organization in their area. The boat was part of the package when they purchased a home in Homosassa Fl. They offered $50,000 for the property. The man had been asking more and he said make it 52,500 and I leave the pontoon boat. So they considered $2500 their basis plus $500 for a couple of things they replaced.

The church gave them an appraisal from an outside appraisor with a FMV of $7500. They figured it was worth about $2000, actually.

If they deduct $7500 now and the church sells the boat and gets $7500 for it this year or next year, they will have to add back to income the amount of the deduction (7500) over their basis (3000) or $4500. Is this correct?

What they wondered is if they can just take a charitable contribution of $3000? Do they have to take the appraised FMV as the amount of their contribution? They would rather take the lessor deduction and just be done with it.

Thanks for your help.
Linda F

[oceanlovin'ea]

Help please charitable contribution

I'm moving this back up to the front to see if anyone can help me with this question.

Boy, you're not on the board for a few days and you go way way back to page 4.

Anyway, any opinions would be appreciated.

Linda F

[Zee]

I'm moving this back up to the front to see if anyone can help me with this question.

Boy, you're not on the board for a few days and you go way way back to page 4.

Anyway, any opinions would be appreciated.

Linda F

Linda- In my opinion, if the charity sells the boat for less than the $7500 appraised value, the return should be amended for the difference. I certainly wouldn't see any problem taking a conservative approach and adjusting the contribution to less than the appraised amount, but a better alternative might be to calculate the tax benefit and have the client save the money aside for any potential future adjustment.

[oceanlovin'ea]

Good idea

The client called the church last week and found out that the man that ran the charity died of a heart attack the day before. His son is taking over and isn't sure when they will sell the pontoon boat.

So I think I will do as you suggested. If they sell it for less and do notify the client, their income might be slightly lower and have less of an impact on the taxes at that time too.

Thanks.

Linda F

[George Boutwell]

Holding Period

If the boat was donated less than a year after it was "bought," the deduction is limited to basis. FMV is irrelevant.

[Zee]

If the boat was donated less than a year after it was "bought," the deduction is limited to basis. FMV is irrelevant.

Oops! George is correct! Thanks for the correction, George. As such, I'd use $3,000 (I hope it's not too late).

[oceanlovin'ea]

No

Its not too late. They are coming in Monday to finish up return.

I will have to ask them when they bought the property. I'm not really sure.

Thanks for all the help.

Linda F

[oceanlovin'ea]

Found copy of title

and the date of issue was Jan 1995. So they have had the pontoon boat for a long time.

So I guess they can take the FMV or if not comfortable and use their basis.

Thanks again.

Linda F