asuly Posted July 4, 2011 Author Share Posted July 4, 2011 Keep in mind it DID run....till it was taken apart. Better look at the actual payback on your alleged 'tax deduction'... Well again it barley ran, I had to keep my foot on the pedal and even then it would kill in 30 seconds. I adjusted the ditributer and it didnt help much. The only thing stopping it from getting back to that condition is the exhaust manifold which was completely my fault. And wouldnt the tax deduction be as much as what I payed for it? Quote Link to comment Share on other sites More sharing options...
Tony D Posted July 5, 2011 Share Posted July 5, 2011 (edited) "And wouldnt the tax deduction be as much as what I payed for it? " What you 'get' is a decrease in AGI when you file your itemized tax return. For this if it exceeds a set percentage of your AGI you may be able to get a tax reduction equal to a percentage of the value donated. Basically, your taxation rate (say 28%) would be the most I would expect you to get on your taxes. Meaning $4000X0.28=1120 reduction in taxes....maybe... Edited July 5, 2011 by Tony D Quote Link to comment Share on other sites More sharing options...
asuly Posted July 5, 2011 Author Share Posted July 5, 2011 This is an excerpt from the IRS website: Example. You donate your car to a local high school for use by their students studying automobile repair. Your credit union told you that the "blue book" value of the car is $1,600. However, your car needs extensive repairs and, after some checking, you find that you could sell it for for $750. You can deduct $750, the true fair market value of the car, as a charitable contribution. Since the Kelley blue book doesn't go back to 1977 that leaves me to determine the fair market value correct? Sorry I'm not trying to prove you wrong or anything you definitely know more than me. I'm just checking. Quote Link to comment Share on other sites More sharing options...
asuly Posted July 5, 2011 Author Share Posted July 5, 2011 This is an excerpt from the IRS website: Example. You donate your car to a local high school for use by their students studying automobile repair. Your credit union told you that the "blue book" value of the car is $1,600. However, your car needs extensive repairs and, after some checking, you find that you could sell it for for $750. You can deduct $750, the true fair market value of the car, as a charitable contribution. Since the Kelley blue book doesn't go back to 1977 that leaves me to determine the fair market value correct? Sorry I'm not trying to prove you wrong or anything you definitely know more than me. I'm just checking. Quote Link to comment Share on other sites More sharing options...
Tony D Posted July 5, 2011 Share Posted July 5, 2011 This is an excerpt from the IRS website: Example. You donate your car to a local high school for use by their students studying automobile repair. Your credit union told you that the "blue book" value of the car is $1,600. However, your car needs extensive repairs and, after some checking, you find that you could sell it for for $750. You can deduct $750, the true fair market value of the car, as a charitable contribution. Since the Kelley blue book doesn't go back to 1977 that leaves me to determine the fair market value correct? Sorry I'm not trying to prove you wrong or anything you definitely know more than me. I'm just checking. No, there is a blue book from kelly that covers your car, KBB for old cars. OK, so you 'deduct' 750 as a charitable contribution. Now repeat after me: You now use that charitable contribution by entering it on line 17 of form 1040A, attaching (MUST ATTACH) form 8283 if over $500, those are totaled on line 19 , added to all your other itemized deductions to decrease your AGI by taking line 29 from 1040A and entering it on line 40 of form 1040, which is then subtracted from your AGI as entered on line 37 of your 1040 (carried forward)....it's then added up and other manipulations done...where long story short your 'deduction' becomes the difference of a couple of lines on the Tax Tables. This DOES NOT mean you get $750 or whatever money you claim as a deduction BACK from the government in the form of a tax refund...it means you decrease your AGI by an incremental ammount and you maybe save $25 on your tax bill. If you are lucky and run on a breakpoint of a tax bracket, it can mean a percentage difference in some cases.... But if you think you just write down $4000 for the value and you get $4000 back...don't happen that way. AT BEST you will get the tax marginal rate saved...like I said AT MOST it will be around $1000. More realistically it will be less. Far less. And if you or your mother doesn't itemize? Fugadaboudit! Speaking of Italio-American Heritage, remember they never got Mr. Capone on his rum running, numbers, or any other illegal activities....they got him on TAX EVASION. If you all of a sudden claim a $4000 deduction for charity and last year you claimed $15? Yeah, that won't raise a flag...not at all! Seriously, it doesn't work the way you think...hope this makes it clear. I know, I'm looking at $21K of itemized deductions on my 2009 refund sitting here in my lap now. This year it almost wasn't worth it to itemize. Next year? Who knows? It will be interesting. Now lets compound this and live outside the USA for 230+ days a year, but never stay in one place for more than 180 days.... Anybody know a good tax lawyer? I got to get someone to tell me about IRS Pub 54 and some technical definitions. I'm not asking the IRS, that rarely works to get a GOOD interpretation. I'm considered (best I can tell) "Itinerant" and can declare my tax residence anywhere I have a house. This has advantages. And I need to move to take advantage of that income exemption! The less I pay the better... Quote Link to comment Share on other sites More sharing options...
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