The Cost of Doing the Right Thing - More disappointment at the GOP's abandonment of limited government principles.



Charitable Contributions Brave Economic Uncertainties



Follow the Rules When Inheriting an IRA



Closer Look at Deductions for Donations to Charity - The examples of overstated deductions for things such as donated vehicles sound familiar. I have often been asked about the tax benefits of donating used vehicles to charities. The questioners usually tell me they can claim a higher amount for a deduction, based on the Kelly Blue Book value, than they would be able to actually receive if they were to sell the vehicle themselves. I have to break the news to them that what they could sell the vehicle for is its true fair market value (and the legally deductible amount) and not what Kelly shows.

I have had similar experiences with people proposing to donate real estate to charities so they can deduct what some appraiser or Realtor claimed was its fair market value because if they were to actually sell the property, they could only get about half that amount. When I was doing my real estate seminars, I used to really offend appraisers when I stated that the values they come up with are nothing more than SWAGs (scientific wild ass guesses) and can't hold a candle to what a property really sells for. Anyone who wants to claim a higher appraised value for a donation than the item would actually sell for is not going to prevail in a dispute with IRS.

This is also applicable to values used on estate tax returns. If an item has been sold between the time the decedent passed on and when the 706 is prepared, using any amount other than the actual sales price for the estate valuation is asking for trouble. IRS does audit a very high percentage of estate tax returns, especially the very large ones. I have had my share of them examined and so far, every one has been accepted as filed because I used actual sales prices for values and not the often quite different appraised values.



Artists Vie to Coin America - With more changes in the design of our currency in the works, it may become harder to know what is real and what is fake money.


- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 12/12/2003 08:35:00 PM Send this post: