Horse Donation > $5,000

[Paul25]

When completing 8283, the only solution I see to get the allowed FMV as a deduction is to check off intangible property.  If I check off tangible property or business inventory/equipment the donation is limited to cost basis.   Why is that?  What's the fix?

[TaxGuyBill]

First, verify that you are allowed to use the FMV, rather than Basis.  In my experience, it is somewhat unusual.to be able to use the FMV when it is higher than Basis.

If you are allowed to use FMV, I think you need to override.  The last I checked, I don't think ProSeries had a way to use FMV (probably because it is unusual that you can use FMV), so you need to override.

[BobKamman]

Was the horse appraised?  Held for more than a year?  Or maybe we're talking about a house.  The U and R are very close to each other on my keyboard.  

[Paul25]

Thank you for your reply.  It is a horse.  It was appraised and it was held for more than a year.

[IRonMaN]

Was Mr Ed a business asset?

[sjrcpa]

Was it depreciable property used in a trade or business/farm?

Does owner raise horses to sell?

[PATAX]

Does the owner pick up the horse droppings? If not please do so. Me and Heidi almost stepped in some yesterday. And when you step in that crap it comes up to your socks. This is more important than the deduction. Thank you.🐕☝

[Paul25]

Mr Ed is business property.  I did answer my own question.  I did not properly answer question on Noncash Contribution worksheet indicating charity's use of property is related to it's tax exempt purpose which is horseback riding for the handicapped.

[BobKamman]

I thought that question applied only to vehicles.  But then, maybe a horse falls into that category.  It doesn't have a VIN, though.  

[sjrcpa]

Then the charitable deduction is limited to the adjusted basis of Mr. Ed.

You have to reduce the FMV by the amount that would be ordinary income if taxpayer sold Mr. Ed.

[TaxGuyBill]

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@sjrcpa wrote:

Then the charitable deduction is limited to the adjusted basis of Mr. Ed.

You have to reduce the FMV by the amount that would be ordinary income if taxpayer sold Mr. Ed.

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Not for appreciated property that is actually used by the charitable organization.  If the charitable organization does not use it (such as they sell it), yes, you are right it would be the Basis.

[TaxGuyBill]

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@Paul25 wrote:

Mr Ed is business property.  I did answer my own question.  I did not properly answer question on Noncash Contribution worksheet indicating charity's use of property is related to it's tax exempt purpose which is horseback riding for the handicapped.

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Thanks, I couldn't find that worksheet until you mentioned it.

[sjrcpa]

Thanks for the correction Mr. Bill.😀