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Old 12-30-09, 12:14 AM   #1
hines drive
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Need help with donating an expensive bike to charity...

Any advice on donating a moderately expensive (2 year old, $1400 new) road bike to charity?

I assume the Salvation Army will take it, but the idea of them selling it for $100 breaks my heart! Any ideas of any other charities that might get better use out of the bike? I am in metro Detroit, and I'm trying to make a donation this calendar year for tax purposes.

Unless I come up with something better, it's off to the Salvation Army with this thing on Thursday.

Thanks for any advice.
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Old 12-30-09, 12:27 AM   #2
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You could sell it yourself and donate the proceeds, of course. Craigslist maybe?
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Old 12-30-09, 12:40 AM   #3
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Good point.
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Old 12-30-09, 01:34 AM   #4
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Perhaps it can be donated to be used as a prize for a raffle.
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Old 12-30-09, 06:43 AM   #5
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I would sell it and donate it. I have never seen a thrift store bike sell for more then 25-35 dollars around here. And the bikes that get sold in that setting will most likely end up rusting in the back yard in a mater of weeks.
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Old 12-30-09, 07:13 AM   #6
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I hope you realize that if the charity sells it for $100, that's the amount considered fair market value and thus the amount of your write off unless you can prove otherwise.
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Old 12-30-09, 10:10 AM   #7
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There may be an organization that could use the bike as part of an fund-raising auction of some sort.
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Old 12-30-09, 10:40 AM   #8
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The Salvation Army personnel may not know bicycles, but they know how to use the Internet. It won't sell for $100 if they can find similar bikes sales on line that will give them an idea of it's value. Another alternative is make sure they know how much it's worth when you donate it to them.
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Old 12-30-09, 03:28 PM   #9
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The Salvation Army personnel may not know bicycles, but they know how to use the Internet. It won't sell for $100 if they can find similar bikes sales on line that will give them an idea of it's value. Another alternative is make sure they know how much it's worth when you donate it to them.
They will price it so that they can sell it in a reasonable amount of time with a reasonable amount of effort. It would seem likely that they would price the $1400 bike at a price much lower than that.

It might make more sense selling it and donating the amount next year. Especially since there is not much time left and it's a bad time to get good prices for used bikes.
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Old 12-30-09, 04:19 PM   #10
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Thanks for the ideas, all. I certainly would sell it myself, but I'm really bizzy right now, and I suck at craigslist, in general (plus I really need the space sooner rather than later.)

There is a charity bike shop in Detroit called "The Hub of Detroit" that sounds like it would be a great place to donate my bike, but they don't appear to have 501(c)(3) status (d'oh!)

I think I may wait until calendar year 2010 to donate this thing. Can't stand to think of it sold for $100...

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I hope you realize that if the charity sells it for $100, that's the amount considered fair market value and thus the amount of your write off unless you can prove otherwise.
I'm not a tax attorney, but the code talks about "fair market value"--which is defined as "what a willing buyer would give on one hand, and what a willing seller would part with the item for, on the other..." (this is a paraphrase)

So, in short, I don't believe your information is correct. Of course, the SA will not assess the value of the item for tax purposes either way--this is left to the donor. My thought is a print out of one or more ebay completed auctions is good evidence of the "fair market value".

***DISCLAIMER*** I AM NOT A TAX ATTORNEY. NOTHING IN THIS MESSAGE IS INTENDED AS LEGAL ADVICE.

Last edited by hines drive; 12-30-09 at 04:20 PM. Reason: typo
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Old 12-30-09, 04:24 PM   #11
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Also, I would guess it would end up, out the back door in the hands of a Salvation Army employee long before it would ever be sold. Ask a Goodwill worker sometime about the cherry picking that gose on there.
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Old 12-30-09, 04:50 PM   #12
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I'm not a tax attorney, but the code talks about "fair market value"--which is defined as "what a willing buyer would give on one hand, and what a willing seller would part with the item for, on the other..." (this is a paraphrase)
I think that, for automobile donations, the tax value is what they actually get for the car. The SA is unlikely to give you a receipt for an amount much larger than what they think they can sell the bike for (and they aren't in the business of selling expensive bikes). Keep in mind that the SA isn't going to want to risk exposure to the IRS for an amount that looks suspicious. I doubt the SA gets many $1400 bicycles.

Of course, it's silly to ask here about what the SA will do. You should talk to them.

Last edited by njkayaker; 12-30-09 at 04:54 PM.
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Old 12-30-09, 05:19 PM   #13
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there is a way if you can wait to get the donation until 2010. talk with someone like myself that is doing a charity ride (tour de cure, ms 150 etc.)
have them do the leg work of raffling it off for tickets or something. take the cash and donate it to the person of such charity ride. in return he is making his donation goal and you get a recieipt for a donation with out having to work for it or deal with selling it.
if you are doing any charity rides im sure you can get with the person runnng your local gig and have them auction it or raffle it for your cause.
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Old 12-30-09, 05:28 PM   #14
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So, in short, I don't believe your information is correct. Of course, the SA will not assess the value of the item for tax purposes either way--this is left to the donor. My thought is a print out of one or more ebay completed auctions is good evidence of the "fair market value".
It's only an issue if it comes up on examination, but FWIW I'm a CPA, hold a masters degree in taxation and have practiced in front of the IRS for ~30 years. I stand by my comment.
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Old 12-30-09, 05:47 PM   #15
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The Salvation Army will give you a recipet of the fair market value of the bike to delcare on your tax return. The price in the store reflects a fair price to cover the store's expenses.
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Old 12-30-09, 06:20 PM   #16
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Goodwill in these parts puts no dollar amounts on any donation forms.
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Old 12-30-09, 08:26 PM   #17
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How about a charity auction?
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Old 12-30-09, 08:30 PM   #18
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SA by my house had a Centurion Iron Man on the floor for $400.

Uggh.
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Old 12-30-09, 09:21 PM   #19
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Your opinion on this matter is in direct contradiction to IRS Publication 561

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It's only an issue if it comes up on examination, but FWIW I'm a CPA, hold a masters degree in taxation and have practiced in front of the IRS for ~30 years. I stand by my comment.
Your opinion on this matter is in direct contradiction to IRS Publication 561. To whit:

Quote:
What Is Fair Market Value (FMV)?

To figure how much you may deduct for property that you contribute, you must first determine its fair market value on the date of the contribution.

Fair market value. Fair market value (FMV) is the price that property would sell for on the open market. It is the price that would be agreed on between a willing buyer and a willing seller, with neither being required to act, and both having reasonable knowledge of the relevant facts. If you put a restriction on the use of property you donate, the FMV must reflect that restriction.

Example 1.

If you give used clothing to the Salvation Army, the FMV would be the price that typical buyers actually pay for clothing of this age, condition, style, and use. Usually, such items are worth far less than what you paid for them.

<snip>

Cost or Selling Price of the Donated Property

The cost of the property to you or the actual selling price received by the qualified organization may be the best indication of its FMV. However, because conditions in the market change, the cost or selling price of property may have less weight if the property was not bought or sold reasonably close to the date of contribution.

The cost or selling price is a good indication of the property's value if:

*

The purchase or sale took place close to the valuation date in an open market,
*

The purchase or sale was at “arm's-length,”
*

The buyer and seller knew all relevant facts,
*

The buyer and seller did not have to act, and
*

The market did not change between the date of purchase or sale and the valuation date.

<snip>

Sales of Comparable Properties

The sales prices of properties similar to the donated property are often important in determining the FMV. The weight to be given to each sale depends on the following.

*

The degree of similarity between the property sold and the donated property.
*

The time of the sale—whether it was close to the valuation date.
*

The circumstances of the sale—whether it was at arm's-length with a knowledgeable buyer and seller, with neither having to act.
*

The conditions of the market in which the sale was made—whether unusually inflated or deflated.


(all emphasis mine)

http://www.irs.gov/publications/p561/ar02.html
IRS Publication 526 reports a special rule regarding motor vehicles:

Quote:
Deduction more than $500. If you donate a qualified vehicle to a qualified organization and you claim a deduction of more than $500, you can deduct the smaller of:

*

The gross proceeds from the sale of the vehicle by the organization, or
*

The vehicle's fair market value on the date of the contribution. If the vehicle's fair market value was more than your cost or other basis, you may have to reduce the fair market value to figure the deductible amount, as described under Giving Property That Has Increased in Value, later.

Form 1098-C. You must attach to your return Copy B of the Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes, (or other statement containing the same information as Form 1098-C) you received from the organization. The Form 1098-C (or other statement) will show the gross proceeds from the sale of the vehicle.

(emphasis mine)

http://www.irs.gov/publications/p526...link1000229704
The name of the form speaks for itself. A bike is not a "motor vehicle". All that said, if you can show me the error of my ways, I would appreciate it (no sarcasm intended!)

And of course, I haven't done my own taxes in several years. And did I mention that I'm not a tax attorney?

***DISCLAIMER*** I AM NOT A TAX ATTORNEY. I AM NOT GOING TO DECLARE $%^! WITHOUT RUNNING IT BY MY ACCOUNTANT FIRST. NEITHER SHOULD YOU!
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Old 12-30-09, 09:25 PM   #20
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there is a way if you can wait to get the donation until 2010. talk with someone like myself that is doing a charity ride (tour de cure, ms 150 etc.)
have them do the leg work of raffling it off for tickets or something. take the cash and donate it to the person of such charity ride. in return he is making his donation goal and you get a recieipt for a donation with out having to work for it or deal with selling it.
if you are doing any charity rides im sure you can get with the person runnng your local gig and have them auction it or raffle it for your cause.
This is the best idea of the thread. Thanks bbeck. And I will be waiting until 2010.

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The Salvation Army will give you a recipet of the fair market value of the bike to delcare on your tax return. The price in the store reflects a fair price to cover the store's expenses.
Doesn't happen here. Admittedly, I've never donated an item worth a great deal before. But even decent electronics (e.g. Made in France food processor worth probably $75,) the value part of the slip is always left blank 'round here. :shrug:
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Old 12-30-09, 11:28 PM   #21
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I was in a "thrift store" the other day (not SA), and saw a vintage bike in nice condition with a $300+ price tag on it. Not exactly your situation, but you might ask them what they think is the best thing to do.
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Old 12-31-09, 08:28 AM   #22
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All that said, if you can show me the error of my ways, I would appreciate it (no sarcasm intended!)
You say my comments contradict IRS publications, yet nothing you quoted of the IRS publications invalidated any of my comments. I see it would be a waste of my time to continue further with this.
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Old 12-31-09, 09:22 AM   #23
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You say my comments contradict IRS publications, yet nothing you quoted of the IRS publications invalidated any of my comments. I see it would be a waste of my time to continue further with this.
I'm not sure if you're trolling now or what. The publications say that I may deduct the "fair market value" which may be defined in several ways, including comparable sales. The special rule about a deduction being limited to the actual sale price is clearly limited to "motor vehicles". All of this directly contradicts your assertion that charitable tax deductions are limited to the amount actually taken at sale by the organization donated to (contradict means says the opposite.)

And at any rate, what's the point in coming into this thread, asserting a point, patting yourself on the back about your credentials when questioned, and then refusing to cite any authority (other than your own credentials) to support your point? More to the point, what has a fellow trying to muddle through the tax code while donating to charity done to offend you? Not taken your naked word as gospel as to the tax code?

All you've done here is stroke your own ego while muddying the waters. So again, I ask: if you want to contribute to this discussion by setting everyone straight, I request that you do so. If not, you're just adding more noise to the internet...
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Old 12-31-09, 09:45 AM   #24
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On further reflection...

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Originally Posted by rogerstg View Post
You say my comments contradict IRS publications, yet nothing you quoted of the IRS publications invalidated any of my comments. I see it would be a waste of my time to continue further with this.
On further reflection, I would like to say one more thing about this comment. Even if misguided, I cited authoritative texts in an attempt to figure this out--what kind of "professional" believes that citing authority is a "waste of his time"?

And when did I ask you for tax advice in the first place? You just don't expect to wander into a bike forum, ask a question about charity, and face misanthropic behavior of this sort...

edit: Happy New Year, everybody!

Last edited by hines drive; 12-31-09 at 09:54 AM. Reason: inject some holiday cheer.
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Old 12-31-09, 10:17 AM   #25
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It's only an issue if it comes up on examination, but FWIW I'm a CPA, hold a masters degree in taxation and have practiced in front of the IRS for ~30 years. I stand by my comment.
Lower of cost or market value? How do you practice in front of the IRS? You mean they actually watch every move you make?
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