Question

In: Accounting

Anita donates a used car to a qualified organization. She bought it3 years ago for $9000....

Anita donates a used car to a qualified organization. She bought it3 years ago for $9000. A used car guide shows the fair market value for this type of car is $6000. However Anita gets a form 1098-C from the organization showing the car was sold for $2900. The vehicle was neither used nor improved by the organization given nor sold to a needy individual. If Anita itemizes her deductions, what amount csn she deduct for her donation?

Solutions

Expert Solution

Fair market value of the car was $6,000

The fair market value can be deducted under following condition:

·         If the charity auction is less than $500

·         If the charity uses the car for its own work

·         If the charity makes material improvement to the car

·         If the charity sells the vehicle to a needy individual

In this case the above conditions do not apply.

Hence,

The itemized deduction for the car will be the sales value of the car . The car was sold for $2,900

Anita can deduct $2,900 as itemized deduction

                                                                             

                                                                                                                 


Related Solutions

When Maria Acosta bought a car 2 1 2 years ago, she borrowed $13,000 for 48...
When Maria Acosta bought a car 2 1 2 years ago, she borrowed $13,000 for 48 months at 7.8% compounded monthly. Her monthly payments are $316.15, but she'd like to pay off the loan early. How much will she owe just after her payment at the 2 1 2 -year mark? (Round your answer to the nearest cent.) $
John bought a car three years ago for $20,000 for personal use.  In 2002, his car was...
John bought a car three years ago for $20,000 for personal use.  In 2002, his car was totally destroyed by a tree that fell on the car.  John did not have insurance that covered this event.  The car’s fair market value before the tree came down was $9,000 and it was worth $0 after the accident.  He has no other personal casualty gains or losses and his AGI for the year was $50,000.  John’s personal casualty loss is $8,000. True/False and Explain.
You bought a car three years ago for $20,000 and financed $16,000 at 6 percent APR...
You bought a car three years ago for $20,000 and financed $16,000 at 6 percent APR for 60 months. You are now thinking about trading in your vehicle for a new one and would like to know how much you still owe on the loan. Assuming that you have made 36 payments so far, what is the balance remaining on your loan?
      Ms. Cressida bought a car for $48,000 exactly three years ago. After making an up-front...
      Ms. Cressida bought a car for $48,000 exactly three years ago. After making an up-front equity payment of $5,000, she borrowed the rest of the car value from her bank in the form of a five-year loan. She negotiated a loan rate of 2.5% APR with semi-annual compounding. She makes loan payments of an equal dollar amount every two weeks (i.e., biweekly), and her first loan payment was due two weeks after she signed the loan contract.                                                    (10...
olin is due to pay $9000 in five years. If she makes three equal payments, in...
olin is due to pay $9000 in five years. If she makes three equal payments, in 20 months, 30 months, and 5 years from today, what is the size of the equal payments if money is worth 5.16% compounded monthly?
Four years ago, Travis, a single taxpayer, acquired stock in a corporation that qualified as a...
Four years ago, Travis, a single taxpayer, acquired stock in a corporation that qualified as a small business corporation under § 1244, at a cost of $60,000. Travis wants to give his son, Jaden, $20,000 to help finance Jaden’s college education. The stock is currently worth $20,000. Travis is considering selling the stock in the current year for $20,000 and giving the cash to Jaden. As an alternative, Travis could give the stock to Jaden and let Jaden sell it...
Since purchasing the car three years ago, a taxpayer has used the standard mileage rate to...
Since purchasing the car three years ago, a taxpayer has used the standard mileage rate to compute his vehicle expense deduction. Which of the following statements is true regarding the taxpayer's current year vehicle expense deduction? The taxpayer cannot use the actual cost method to compute his vehicle expense deduction. The taxpayer can use either the standard mileage rate or actual cost method to compute his vehicle expense deduction. The taxpayer must use the actual cost method to compute his...
Steinar loan a friend 9000 to buy some stock 3 years ago. I the current year...
Steinar loan a friend 9000 to buy some stock 3 years ago. I the current year the debt became worthless. a. How much is Steinar's deduction for bad debt for this year ? Assume he has no other capital gains or losses) $----- as a -'--- bad debt. b. What can Steinar do with the deduction not used this year? The remaining$---- can carried forward as--- and deducted in future years , subject to ----.
Three years ago, you bought a 12% bond that had 7 years to maturity and a...
Three years ago, you bought a 12% bond that had 7 years to maturity and a yield to maturity of 12%. Today (after the sixth interest payment), you sold the bond when it is yielding 13%. What is your annual rate of return for the three year period? All coupon payments are semi-annual, and the par value is $1,000.
A company is considering replacing a machine that was bought six years ago for $50,000.
A company is considering replacing a machine that was bought six years ago for $50,000. The machine, however, can be repaired and its life extended by five more years. If the current machine is replaced, the new machine will cost $44,000 and will reduce the operating expenses by $6,000 per year. The seller of the new machine has offered a trade-in allowance of $15,000 for the old machine. If MARR is 12% per year before taxes, how much can the...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT