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This charitable giving can help cut back on your taxes.
For vehicles valued at less than $500, the deduction amount comes from the donor's own estimate of the car's value, even if the charity receives less money from its sale. Deductions greater than $ 500 are limited to the proceeds of selling the vehicle, usually at auction .
Abby, our taxpayer, owns a sporting goods store. Her business is doing well so she decides to donate some of last season's inventory to The Women's Sports Foundation, a certified charitable organization. Abby's adjusted gross income this year is $700,000. The fair market value of Abby's donated inventory is $600,000.
The fair market value of property is the price at which it would change hands between a willing and informed buyer and seller. The term is used throughout the Internal Revenue Code , as well as in bankruptcy laws, in many state laws, and by several regulatory bodies.
Real estate agents use fair market value to help determine pricing. ... a third-car garage bay may be valued around $5,000 to $7,000 and a full bath may be worth $5,000 to $7,000,” Ameer says. ...
Car donation charities, which often bombard the airwaves with solicitations for vehicles, are among the targets of a wide-ranging investigation into whether donors are getting taken for a ride.
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