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Donated Vehicle - used by charity - not resold


BulldogTom

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Client gave a older Honda Accord to a bona fide charity.   His basis is $3,300.   FMV is $4,850 according to the charity receipt.   The car will actually be used by the charity, not sold off for $.

How do I show this on the 8283 in ATX.   When I select Vehicles as the type of property donated, the software wants an entry in Gross Proceeds from Sale.   If I put in a Zero, ATX makes the deduction zero.   I can override the deduction amount, but I always hesitate to do that.

Any help appreciated.

Thanks

Tom
Longview, TX

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Agree with Lion that possibly using the 1098-C may help.  Client has met the exception to using proceeds because the charity is keeping the vehicle for significant use for itself. If the 1098-C has all the required information including that the charity is keeping it, the deduction should be allowed in full and not limited to either -0- or the other $500 limit.

It's interesting that in today's market that this older car's FMV is higher than basis. I know there could be lots of reasons for that, but the value of used vehicles has risen dramatically since the shutdown and supply issues of new cars, parts, and computer chips. 

Edited by jklcpa
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Problem is the charity did not give him a 1098C.   It is a normal donation receipt like you get from Goodwill or Salvation Army.   And it is not signed.

I went to the Master Tax Guide and I am coming up with the need for a 1098C from the charity (or a substantially similar document with all the required information that is on a 1098C).   Also, as soon as I hit the drop down for vehicle on the 8283, ATX pulled in a 8453 with the box checked for a 1098C.   I think I remember that you have to attach or send the 1098C in the mail to the IRS.   Need to dig some more on the exact procedures for claiming the donation.

As to the value, the client is a retired mechanic and he still likes to tinker with cars in his garage.   He bought it for $2900 and put about $400 in parts into it.   Used it as a daily driver for a while until he gave it to the charity down the street.   The valuation does not bother me, because I know he is a really good mechanic.  I am certain he would not have given them the car if it was not mechanically reliable.

Tom
Longview, TX

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8283 instructions says 1098C or othe similar acknowledgement, and those instructions has details of what is required.

As to the value, I wasn't implying that the value was overstated but was merely making a general observation about how prices of used vehicles have increased since the beginning of 2020. Sorry I brought it up.

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"You received Form 1098-C because you donated a motor vehicle, boat, or airplane (“donated vehicle”) to the charity shown on the front of this form. Generally, the charity must furnish this form to you no later than 30 days after the date it sold the donated vehicle (if box 4a is checked) or 30 days after the date of the contribution (if box 5a or 5b is checked). If none of these boxes is checked, you must obtain this form by the due date (including extensions) of your tax return for the year of the contribution (or, if earlier, the date you file that return). "

If these instructions for 1098 C are still current, you may be dead in the water.

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5 hours ago, jklcpa said:

8283 instructions says 1098C or othe similar acknowledgement, and those instructions has details of what is required.

As to the value, I wasn't implying that the value was overstated but was merely making a general observation about how prices of used vehicles have increased since the beginning of 2020. Sorry I brought it up.

I was not being defensive, no apology needed.   If it was not someone I knew, I would question it too.  I was just explaining why this particular vehicle appreciated in value.

Tom
Longview, TX 

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On 4/2/2022 at 1:48 PM, BulldogTom said:

Also, as soon as I hit the drop down for vehicle on the 8283, ATX pulled in a 8453 with the box checked for a 1098C

 In ATX  you attach  either 1098-C or a  copy of the contemporaneous written acknowledgment directly to 8283.

The input gives you a choice of check box for 1098-C received or check box for contemporaneous written acknowledgment.

Not sure why 8453 would have popped up.

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'Back in the day' and even now, Form 8453 was the form which had to be mailed in with certain other forms, such as 1098-C and 8332. Purpose of Form - Use to send any required paper forms or supporting documentation....  When and Where to File If you are and ERO - you must mail Form 8453 to IRS within 3 business days....

I've had to use this for the above mentioned forms several times over the years but not recently.  I didn't know that it could be attached electronically so happy to see that.

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Client got the 1098C from the charity, when you fill in the boxes, everything flows perfectly in ATX.   Attached the 1098C to the return and I think I am good.   Waiting for another unrelated piece of info from the client and I should be able to efile this return tonight.

Thanks for all your responses.

Tom
Longview, TX

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