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Are found items given to charity still deductible

Are found items given to charity still deductible?

Does the fact that I found something in the trash make it any less deductible when I have given it to a charity?

I often pick good things out of the trash and keep them or give them to goodwill.

But this time, I found in the trash a electric wheel chair worth in its current condition 1500 dollars. It had a special attachement and was 4000 or 4500 new iirc, and they sell them used also for about

1500.

I gave it to a charity that lends such wheelchairs to people who need them and got a receipt.

Thank you.

Reply to
Bobby
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Since found property is taxable income, you first report it on your

1040, line 20, other income.

After that, should you give it to charity, the deduction already has the correct value attached to it.

ChEAr$, Harlan Lunsford, EA n LA

Reply to
HLunsford

Amount deductible for charity is lower of cost or fair market value (FMV). Since your find had cost basis of zero to you, no deduction...

...unless you reported your find as treasure trove taxable income first, then you could use it as a deduction.

-Mark Bole

Reply to
Mark Bole

But if I hold it for a year, I can deduct FMV even if that's in excess of cost, right? (And if I auction it on eBay with the proceeds going _directly_ to the charity, then I've established FMV directly, and it's as if I donated the item and the charity sold it immediately, I think.)

Seth

Reply to
Seth

Technically, it's over one year and held for personal use or investment. That would make it a long term capital asset for which you could deduct the FMV subject to the 30% of AGI limitation.

Reply to
Alan

Thanx both for the clarification. I think this is something I need to be beaten over the head with every year. Deduction is not lower of cost or FMV, it's just FMV.

But for item donations totaling over $500, taxpayer has to keep records of the cost.

Donating appreciated capital assets is yet another layer of complexity.

Good question for the month of August!

-Mark Bole

Reply to
Mark Bole

Sure, it's deductible - _if_ you report finding the chair as income. So it would be a wash. From Pub. 17: "If you find and keep property that does not belong to you that has been lost or abandoned (treasure-trove), it is taxable to you at its fair market value in the first year it is your undisputed possession."

Reply to
D.F. Manno

It might not even be a wash. If your itemized deductions without the chair donation is $1000, then with the chair it is $2500. Your standard deduction is higher and you don't get a benefit of the donation. However, you do report the chair as Other Income on line 21

-- but I think that's only needed if you intend to keep the chair.

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