Pink Bat / Komen Foundation Tax Deduictible Receipts

[stlbats]

The last bat I won on MLB auctions, came with the LOA from team as well as a separate letter clearly stating for income tax purposes and had the exact amount that was deductible. If I remember right the amount was less than the total purchase price, but only about $50 less. This has been about 2-3 yrs ago.

Thanks
Jason
stlbats@bellsouth.net

[allstarsplus]

Here's some info that might come in handy since so many game used items seem to originate from charity auctions...

Valuation

Some items, such as those readily purchased at a retailer for fixed or suggested prices, are more easily valued than items such as art, memorabilia and meals with notable people. Both the donor and the charity must value the item.

The donor is responsible for valuing the item in order to substantiate his or her deduction, if any. The donor has the burden of proving to the IRS how he or she determined the fair market value of the donated item. If the donated item is worth more than $5,000, a written appraisal is required. Donors also are required to present a written acknowledgement or receipt from the charity for any non-cash contributions valued at more than $250. Sec. 170(f)(8); Reg. 1.170A-13(f).

In addition, the charity also has a responsibility to value the item, because it must provide this information to potential bidders, and more importantly, to the winning bidder for his or her deduction. Many charities include this information in their auction brochure or bidding list.

Taxation of Winning Bidders

Another common misconception is that any item won at a charity auction is fully deductible as a charitable contribution. If a bidder wins an item, he or she is allowed to deduct only the amount over the fair market value of the item. A contribution for which the donor receives something in return is called a quid pro quo contribution.

For example, Bidder places the winning bid on a dinner for two at a local restaurant. The fair market value of the dinner is $75. If Bidder pays $75 or less for the dinner, Bidder cannot deduct any of the bid payment as a charitable deduction.

Alternatively, Bidder wins and pays $125 for the same dinner. Bidder may deduct $50 of his or her payment as a charitable deduction because Bidder paid $125 for a dinner with a value of $75. The difference, $50, is the value of Bidder's gift to charity.

Charity Documentation

As mentioned above, the charity must provide documentation to the donor and to the winning bidder. The charity should provide the donor with a gift receipt that states the date and location of the charitable contribution, describes the donated item and states whether or not the donor received any goods or services in return. The charity is not required to provide the fair market value of the item in the gift receipt. As discussed above, it is the donor's responsibility to determine the fair market value of his or her gift.

Rob - Very strong points as that is a common mistake that someone will buy a jersey for $1,000 at a charitable auction and write off the entire $1,000 which is not correct.

I am a CPA albeit my license is inactive so don't take my comments as tax advice, but I find it a shame that those pink bats didn't come with a charitable letter spelling out the Fair Market Value of the bats for tax purposes.

Fair Market Value is extremely subjective as it would be the price that bat would fetch in a sale if it was not a charitable item. Well, putting a number on a bat used for 1 game can't be readily achievable so you usually rely on the Charity to disclose the FMV amount.

When I went to my last Super Bowl, I attended several parties and for instance the Taste of the NFL Dinner clearly stated $725 of my $775 dinner was tax deductible as a Charitable Donation.

I would email MLB or email the Susan B. Komen Foundation and see if you can get a letter or consult your CPA.

Andrew

[Fnazxc0114]

do you guys know if you can write these off on your taxes. if so it would help me out next year.

[PK]

Only the amount above and beyond the value of the bat that you paid can be claimed, which if I remember correctly from last year was about $200-$250. So only anything above at amount can technically be claimed. Now if you do your own taxes and want to be nervous for 7 years.....

[suave1477]

You wont be nervous for 7 years you can write it off its not that big of a deal.
Your just writing off $250 which most people do not realize when you write something off you dont get the whoel thing back you only get a small percentage.
So technically if you wrote off $250 you would be getting back like $15 to $25.

I am pretty sure the IRS is not gonna hunt you down for $25 lol lol

[Fnazxc0114]

i dont ususally get enything back. but i though that charity contributions are a dollar for dollar reduction on youur overall income so i have to pay in less.

[suave1477]

I am not an expert but I cant imagine it being dollar for dollar I never heard of a tax write off being dollar for dollar.

The closest you get is writing off education which I believe you get back 33%

[Fnazxc0114]

i guess this would be a good question to ask my accountant on monday

[kj33706]

yes u can.

[joelsabi]

i just saw a pink batting helmet signed by arod. do the yankees really use pink helmet on mothers day or is this another manufactured souvenir?