Help with tax benefits of donating horse to school

[donkeyman]

Can anyone tell me the actual tax benefits for donating a horse to a riding college.

Have a school willing to take the donation at $50,000 (yes it is an ultra fancy horse and has been appraised). What tax benefit does someone realize for doing this, in hard numbers? I have googled and can see form 8283 but it does not provide a formula. Certainly my COTH folks know.

[magmir]

Can anyone tell me the actual tax benefits for donating a horse to a riding college.

Have a school willing to take the donation at $50,000 (yes it is an ultra fancy horse and has been appraised). What tax benefit does someone realize for doing this, in hard numbers? I have googled and can see form 8283 but it does not provide a formula. Certainly my COTH folks know.


First, I think the school needs to keep the horse for a minimum of three years in order for you to get the full deduction. In addition, I think it is a deduction (as opposed to a tax credit), so the tax benefit is significantly less substantial - not dollar for dollar as a credit would be, and the actual tax benefit to you will depend on what tax bracket you are in. Also, I think the amount you can deduct also depends on whether you donate as a private individudal or as a business that owned the horse as an asset, as if the businss owned the horse as an asset and either depreciated it or claimed a loss for the reduction in its value that will reduce the value of what you cna claim as a deduction. I am no expert at all, this is just my very basic understanding of the iseue, and I would really consult with a good CPA on this before making decisions.

[joiedevie99]

Call your accountant and ask them to figure out the dollar value to you of a $50k charitable donation. There is no way to figure it out without knowing lots of things about your tax returns.

[Janet]

You need to know what your Marginal tax rate is. To the first approximation, you will rdeuce your taxes by (marginal tax rate)*$50,000.

But there are limits, based on your income, on how much of a deduction you can take, and it may need to be spread over several years.

You need to talk to your accountant. Or, at a minumum, use something like Turbo Tax to calculate your tax with and without the donation.

[Lieb Schon]

My former trainer is also an attorney, and he did the appraisal for my donated horse. He recommended staying under $20,000 because the IRS flags donations over that amount, and you will risk an audit.
Also the school is supposed to provide you with the form because they have to acknowledge acceptance/ receipt for their tax records. I donated with Sweetbriar, and it was extremely pleasant and professional! Shelby has sent me a Christmas card every year of my beloved "Boo," and I am very grateful!
Lastly, I believe I saw a return of $7000.00 for a $19,000.00 professionally appraised donation. Again, based on our tax bracket and other deductions. I don't think the donation can be collected over several years. That is for a business loss, like devalued stock. I had a horse I had to put down and wanted to write him off as a loss, but I had to wait 3 years until I sold a second horse to prove it was a "business" in the eyes of the IRS. Then I could use up to $2000.00 a year for 3 years max. Any way you cut it, you will only recover 1/3 to 1/2 in tax breaks for the one year, and I'm sure there is a cap on that. (You don't have to be a business to donate, and a donation is not considered a loss.) You need a good AG pa.:yes: Regardless, get on it before the new Administration changes things. Right now the kinder friendlier IRS can only look back 2 yrs in a normal audit, but that's going to change soon when they start looking for new ways to scrape money out of peoples pockets. How do you like the smell of audit in the morning!

[Moli]

Can you spell "IRS AUDIT" ! Been there, done that. Won in the end (actually, no one wins with the IRS), however, we spent more than we saved. :mad: