I donated a Macintosh G4 to the film department at my alma mater, and I need to figure out how to determine it’s worth so I can get a reciept.
The person I usually ask about this stuff is the person I donated to, so I can’t ask him, it’s a conflict of interest.
Any ideas how to go about this?
I’d search the completed listings on eBay.
Computers depreciate rather quickly. I am not giving you advice but the standard operating procedure for this type of thing whether it is a really crappy car or a used computer is to come up with the highest plausible value for it. You can look in any advertising listing and find people trying to sell 1994 model computers for $200 dollars less than they did in the day. I wouldn’t advise that but it is pretty easy to come up with documentation for whatever value you choose.
If you want to be really legit, there is software like It’s Deductible bundled with some versions of TurboTax that will help you out and keep you out of trouble. In reality, the IRS tends to be pretty liberal with individual charitable deductions as long as people don’t go crazy.
So, search the completedl listings and estimate from there roughly? I’m not going to get a reciept for $10,000 and hope to sneak it by the IRS, and we’ll only have the one donation for the year, so a couple of hundred bucks shouldn’t raise any eyebrows.
Thanks for the advice, I wasn’t sure even how to get started.
When I was Treasurer of a non-profit organization, our Accountant had us depreciate our computers on a 5-year, straight-line basis. So we just reduced their value from the purchase price by 20% each year. We eventually sold them to employees (about 3-4 years in) for the remaining non-depreciated value.
So you might try this method.
Get your purchase date & purchase price, depreciate it at 20% per year, and use that as the ‘reasonable market value’. This will probably give you a higher value than looking at ebay sales, and is a reasonable process under IRS rules.
I’m curious as to why it’s a conflict of interest to ask the person you’re donating it to - does he have to declare it as a gained asset somehow? If it’s a gift, should it matter what value you deduct from your own taxes for it?
The IRS is very concerned with the value you deduct from your taxes for a gift – they want to be sure that the value is a realistic market value for the item.
They would consider a valuation set by the recipient of the gift as conflicted, because it would be in his best interest to set a very high value on the gift, thereby providing the giver with a larger tax deduction. (That would also increase his ‘income’ by this value, but since the recipient is a non-profit exempt from taxes, that doesn’t matter to him.)