Tax writeoff donation?

[panteramatt 27]

Has anyone ever donated something for a tax writeoff? Im selling a camper I want $3200 for. Someone is interested from a non profit for vets and says if I donated, it would be a $6700 tax deduction. So if its legit, basically I would get back $6700 more from my tax return next year? You think its a scam?

[PK90 3,570]

Doesn't it equate to you paying 2% of that $6700 less taxes?

 

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[panteramatt 27]

I have no idea how it works thats why Im asking. 

[Zeke 5,504]

$6700 comes off the top. So what ever rate your at use that %. It is possible that it may push you to a lower rate bracket.

 

Donated wife's 1st car. They had to tow it out. Got the highest kbb value on the receipt. 5x what I could have possibly sold it for. Vietnam vets or Purple Heart. I don't recall

 

We do use Vietnam Vets for clothes as they pick them up from our home. @$50 per bag donation.

[Zeke 5,504]

If you can sell it for $3200 you will make out better than the deduction. Unless, cough, you claim that as income........

[panteramatt 27]

Basically my wife and I combined get back about $2000-$3000 back from federal. If I donated the camper and the receipt shows $6700 value how much ore would I recieve back from tax return? Im just debating if I would get my asking price for my camper back in tax returns.

[Heavyopp 167]

If it truly is 2% off as PK90 says thats $134 back

[MartyZ 693]

The $6700 is deducted from your gross taxable income, not from your total tax amount. So for example if your taxable income is $80,000, with this donation it would be $73,300. So you will pay taxes on $73,300 instead of $80,000. It is also possible, as stated above, that it might bring you down enough to get you into a lower tax bracket. Only you know your gross taxable income so you would have to crunch the numbers to see if it makes sense. If you have an accountant who you does your taxes and is familiar with them, I would give him a call.

[panteramatt 27]

Perfect explanation, thank you. 

[T Bill 649]

There is no 47.76 percent tax bracket so your losing money on the deal.  Take last years tax return, take the number off the bottom of first page of 1040 and divide it into the total tax from the back of the second page.  The result is a basic estimate of your tax bracket.  Take that percentage and multiply it by the 6700, result is the estimated amout you saved and the value of your donation. Greater than 3200 your in, less your out of pocket.

 

Yes, I know he can cross tax brackets and the amout would be greater, this is just a rough estimate

[Zeke 5,504]

There is no 47.76 percent tax bracket so your losing money on the deal. Take last years tax return, take the number off the bottom of first page of 1040 and divide it into the total tax from the back of the second page. The result is a basic estimate of your tax bracket. Take that percentage and multiply it by the 6700, result is the estimated amout you saved and the value of your donation. Greater than 3200 your in, less your out of pocket.

 

Yes, I know he can cross tax brackets and the amout would be greater, this is just a rough estimate

Exactly^^^*

In my case the car at Best was worth $800 I got over $4k on receipt plus lack of headaches. A junkyard would give me $500 minus the tow.

 

So if you can sell you will make out better. But, that sale is "technically " income.....

[YankeeSC 1,204]

We do use Vietnam Vets for clothes as they pick them up from our home. @$50 per bag donation.

 

You can get much more than that.  We also donate many bags of clothes each year to Vietnam Vets (I have a wife and 3 step-daughters!).  I use TurboTax ItsDeductable to "itemize" each article of clothing and it sets the value of each piece.  It adds up pretty fast and it's not unusual for us to get $1000 out of a several bags in the course of a year ...

[Zeke 5,504]

You can get much more than that. We also donate many bags of clothes each year to Vietnam Vets (I have a wife and 3 step-daughters!). I use TurboTax ItsDeductable to "itemize" each article of clothing and it sets the value of each piece. It adds up pretty fast and it's not unusual for us to get $1000 out of a several bags in the course of a year ...

2 bags on the porch now. We average 7 a year.

Remember with taxes, pigs get fat, hogs get slaughtered.

[beachwhistle 28]

Doesn't it lower your taxable income by the amount donated.

If your in the 20% bracket it'll save you 1340 in taxes.

[maintenanceguy 510]

Also, keep in mind that if you're ever audited, they may check to see what the camper was really worth.  If you donate a camper worth $100 and the non-profit gives you a letter claiming that you made a $10,000 donation, they committed fraud.  If you used that letter to deduct $10,000 from your taxable income, you committed fraud.

 

And as everyone else already said, you don't take the donation amount off of your tax bill, you only save the taxable portion of that donation.  Every time I hear somebody say that a business only made a donation to a charity because it saves them money on their taxes, I cringe.

[MartyZ 693]

Also, keep in mind that if you're ever audited, they may check to see what the camper was really worth.  If you donate a camper worth $100 and the non-profit gives you a letter claiming that you made a $10,000 donation, they committed fraud.  If you used that letter to deduct $10,000 from your taxable income, you committed fraud.

 

And as everyone else already said, you don't take the donation amount off of your tax bill, you only save the taxable portion of that donation.  Every time I hear somebody say that a business only made a donation to a charity because it saves them money on their taxes, I cringe.

From what I understand the IRS allows to deduct the blue book value, based on model, year, mileage, condition, etc...  How can the IRS tell what kind of condition it was in after the fact? Can they actually make the charity have the vehicle inspected?

[Zeke 5,504]

From what I understand the IRS allows to deduct the blue book value, based on model, year, mileage, condition, etc... How can the IRS tell what kind of condition it was in after the fact? Can they actually make the charity have the vehicle inspected?

^^^^ this is correct!

[panteramatt 27]

Wealth of info here thanx guys I always can count on people on this forum for excellent advice!!! I guess Ill just sell it outright

[mustang69 505]

1 other thing to remember - if you're hit with AMT that tax deduction can amount to exactly $0

[jackandjill 683]

The way my accountant explained about donation is  (as example)... for every $1 you donate you deprived IRS of 30 cents, but lost 70 cents of your own, for the satisfaction of doing so. 

[T Bill 649]

The way my accountant explained about donation is  (as example)... for every $1 you donate you deprived IRS of 30 cents, but lost 70 cents of your own, for the satisfaction of doing so. 

Exactly.  Here's one for ya. People always tell me how much money they save in taxes with a mortgage.  I tell them how much money they are losing.  Nobody gets it.  Same principle.  Spending a dollar to save a dime.

[Zeke 5,504]

Ah the famous " it's a write off"...

No, I would rather have the money and pay the %

Than have to spend the money. But if I must, then I shall

[itemize 0]

Exactly^^^*

In my case the car at Best was worth $800 I got over $4k on receipt plus lack of headaches. A junkyard would give me $500 minus the tow.

 

So if you can sell you will make out better. But, that sale is "technically " income.....

Technically you'd only have income to the extent that the amount you receive exceeds your basis in the property. For a personal item like a camper your basis is most likely what you originally paid for it.  

[Zeke 5,504]

Technically you'd only have income to the extent that the amount you receive exceeds your basis in the property. For a personal item like a camper your basis is most likely what you originally paid for it.

I like this guy.

Translation, what I profit. Correct

[kirk2022 43]

Tread carefully here, Many explanations above to what you will really receive $wise. A receipt is only as good as what the value is deemed if you happen to be audited in the future.

NADA does have A appraiser app for rvs if its not really really old (10 years) for an example. If its in decent shape you would be surprised how easy it might be to sell on craigslist or the likes of it.  We've rv'd for years and have always had good luck selling units over trading.

Theres always young couples looking to start or move from A tent or popup to A travel trailer.  List is somewhere and use the time between now and the end of the year to maybe sell it for true dollars in your pocket. Post for $3200.00 if it is A good figure for it and take $2300.00 t0 2500.00 for it.  You'll be way ahead in actual dollars then the amount added to your return.

[Golf battery 1,223]

With write offs. Isnt there up to a certain amount you can claim per year with charitable donations?

[mikeyjones 88]

With write offs. Isnt there up to a certain amount you can claim per year with charitable donations?

 

Generally 50% of your AGI is the limit. 

[Zeke 5,504]

^^^^^ yes

[Golf battery 1,223]

Awe hell. Then i got some work to do.

[AlDente67 563]

I only donate items I can't or won't bother to sell anyway.  For instance old clothes...rather have them go to someone who can use use them instead of the landfill.  The tax benefit is trivial.

 

Did you know that donated clothes in those bins are sorted by pickers of a number of countries who select items based on their preferences?  Then anything not wanted by any picker goes to the 'Bag o Rags' manufacturer?  I heard this and not sure if true, but interesting.

 

Some other unsubstantiated trivia...that Cars for Kids outfit takes the sales proceeeds and gives it only to pay medical bills of Orthodox Jewish kids.  That is the story I heard.  Don't shoot me.