What kind of tax right off is possible?
Exploring possiblities... Thinking about donating the Model T to the T-Plex in Detroit.
1.Tax laws change all the time. But the last time I checked you basically only need a couple of things.
2. A good appraisal (i.e. a rusted pile valued by the owner at millions of dollars would probably not fly with the IRS).
3. You need an IRS approved organization. There are many worthy organizations in the world. But the IRS only allows you to take the tax deduction if it is one of the ones the IRS currently recognizes. TPLEX is one of those IRS recognized organizations (so is the MTFCA Museum).
4. And then coordinate with the museum to find out if they want the item and what they plan to do with it. I strongly recommend avoiding donating an item with any strings attached. It can cause the museum issues later on and it also may or may not impact your ability to claim the tax deduction.
5. Feel free to contact T-Plex. I'm sure they will gladly answer any of your questions, and they will be a lot more up to speed on how they do it. I think if they sell the vehicle within so many months or years that will be the max value the IRS will expect you to claim – but it has been a while since I read anything on the way it is handled. Also -- contact your own tax person to find out if there are any benefits to donating it one year over another year etc.
6. A few years ago the tangible property was treated dollar for dollar as a donation (i.e. fully deductable) but I had to have a signed receipt from the organization stating what I had donated, when I had donated it, that I no longer had any control over the object, and a valid reason why I valued the object as I did. The IRS got a little hacked off at some folks donating their modern car that was totaled in a wreck and taking the full Blue Book value for it … so they have increased the required documentation over the last ten years.
7. T-Plex would be a great organization to consider supporting. Thanks for asking the question.
Hap Tucker 1915 Model T Ford touring cut off and made into a pickup truck and 1907 Model S Runabout. Sumter SC.
Eric & Hap: One thing to add to Hap's information. The appraisal needs to be an IRS approved appraisal, otherwise they can reject it and you would lose the deduction. The deduction, by the way, would be a charitable deduction and on your Form 1040 (I am assuming this would be a personal donation) would be reported on Schedule A. The actual tax benefit would be dependent upon your taxable income and also the amount,if any, of your other itemized deductions and whether or not they exceed they 'standard' deduction and by how much.