My church was getting rid of an old van, so they gave it to my partner and I and we use it for hauling tools, debris, etc.
Should we “buy” the van for a nominal sum to make it a sale vs a donation?
Same questions with my copying machine? I got it off the free section of craigslist. some lady didn’t want it in her home anymore and it’s in perfect shape so she just gave it to me for free. Tax implications?
Hi,
The basis for taxes are if you paid nothing you have no purchase basis!
If you pay $500 you have a $500 purchase basis.
The big question is "Do you really want to take $500 out of your pocket right now to pay for a van you recieved for free?
Your still entitled to take a “Per mile” deduction for your business use or take a fuel and repairs deduction.
The only thing you don’t get is a depreciation basis against value!
Basically the same thing goes for the printer.
GR
k, thanks!
Let’s turn the question around. What if you gave the property you received for free to a charitable organization? What is your charitable donation tax deduction, if any?
If you owned the property one year or less the charitable contribution deduction is your cost basis, or, zero in the case of the van and the copier.
However, when you have owned the property more than one year, the value of your charitable contribution deduction is the fair market value of the property.
NICE! I knew there had to be some benefit or tax consequence! Thanks Dave