Page 74 - Virtual Currencies
P. 74
13:22 - 13-Feb-2023
Page 8 of 25
Fileid: … tions/p526/2022/a/xml/cycle10/source
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
Clothing and Household Items If you don't attach Form 1098-C (or other Deduction $500 or less. If the qualified or-
statement), you can't deduct your contribution. ganization sells the vehicle for $500 or less and
You can't take a deduction for clothing or You must get Form 1098-C (or other state- Exceptions 1 and 2 don't apply, you can deduct
household items you donate unless the clothing ment) within 30 days of the sale of the vehicle. the smaller of:
or household items are in good used condition But if Exception 1 or 2 (described later) applies, • $500, or
or better. you must get Form 1098-C (or other statement) • The vehicle's FMV on the date of the con-
within 30 days of your donation. tribution. But if the vehicle's FMV was more
Exception. You can take a deduction for a than your cost or other basis, you may
contribution of an item of clothing or a house- Filing deadline approaching and still no have to reduce the FMV to get the deducti-
hold item that isn't in good used condition or Form 1098-C. If the filing deadline is ap- ble amount, as described under Giving
better if you deduct more than $500 for it, and proaching and you still don't have a Form Property That Has Increased in Value,
include a qualified appraisal prepared by a 1098-C, you have two choices. later.
qualified appraiser and a completed Form 1. Request an automatic 6-month extension If the vehicle's FMV is at least $250 but not
8283, Section B. of time to file your return. You can get this more than $500, you must have a written state-
extension by filing Form 4868, Application ment from the qualified organization acknowl-
Household items. Household items include: for Automatic Extension of Time To File edging your donation. The statement must con-
• Furniture and furnishings, U.S. Individual Income Tax Return. For tain the information and meet the tests for an
• Electronics, more information, see the Instructions for acknowledgment described under Deductions
• Appliances, Form 4868. of at Least $250 but Not More Than $500 under
• Linens, and Substantiation Requirements, later.
• Other similar items. 2. File the return on time without claiming the
Household items don't include: deduction for the qualified vehicle. After FMV. To determine a vehicle's FMV, use the
receiving the Form 1098-C, file an amen-
• Food; ded return, Form 1040-X, Amended U.S. rules described under Determining FMV, later.
• Paintings, antiques, and other objects of Individual Income Tax Return, claiming the
art; deduction. Attach Copy B of Form 1098-C Donations of inventory. The vehicle dona-
• Jewelry and gems; and (or other statement) to the amended re- tion rules just described don't apply to dona-
• Collections. turn. tions of inventory. For example, these rules
don't apply if you are a car dealer who donates
FMV. To determine the FMV of these items, Exceptions. There are two exceptions to the a car you had been holding for sale to custom-
use the rules under Determining FMV, later. rules just described for deductions of more than ers. See Inventory, later.
$500.
Cars, Boats, and Airplanes Exception 1—Vehicle used or improved Taxidermy Property
The following rules apply to any donation of a by organization. If the qualified organization If you donate taxidermy property to a qualified
qualified vehicle. makes a significant intervening use of, or mate- organization, your deduction is limited to your
rial improvement to, the vehicle before transfer- basis in the property or its FMV, whichever is
A qualified vehicle is: ring it, you can generally deduct the vehicle's less. This applies if you prepared, stuffed, or
• A car or any motor vehicle manufactured FMV at the time of the contribution. But if the mounted the property or paid or incurred the
mainly for use on public streets, roads, and vehicle's FMV was more than your cost or other cost of preparing, stuffing, or mounting the
highways; basis, you may have to reduce the FMV to get property.
• A boat; or the deductible amount, as described under Giv-
• An airplane. ing Property That Has Increased in Value, later. Your basis for this purpose includes only the
The Form 1098-C (or other statement) will show cost of preparing, stuffing, and mounting the
Deduction more than $500. If you donate a whether this exception applies. property. Your basis doesn't include transporta-
qualified vehicle with a claimed FMV of more Exception 2—Vehicle given or sold to tion or travel costs. It also doesn't include the di-
than $500, you can deduct the smaller of: needy individual. If the qualified organization rect or indirect costs for hunting or killing an ani-
• The gross proceeds from the sale of the will give the vehicle, or sell it for a price well be- mal, such as equipment costs. In addition, it
vehicle by the organization, or low FMV, to a needy individual to further the or- doesn't include the value of your time.
• The vehicle's FMV on the date of the con- ganization's charitable purpose, you can gener-
tribution. If the vehicle's FMV was more ally deduct the vehicle's FMV at the time of the Taxidermy property means any work of art
than your cost or other basis, you may contribution. But if the vehicle's FMV was more that:
have to reduce the FMV to figure the de- than your cost or other basis, you may have to • Is the reproduction or preservation of an
ductible amount, as described under Giv- reduce the FMV to get the deductible amount, animal, in whole or in part;
ing Property That Has Increased in Value, as described under Giving Property That Has • Is prepared, stuffed, or mounted to recre-
later. Increased in Value, later. The Form 1098-C (or ate one or more characteristics of the ani-
Form 1098-C. You must attach to your re- other statement) will show whether this excep- mal; and
turn Copy B of the Form 1098-C, Contributions tion applies. • Contains a part of the body of the dead an-
of Motor Vehicles, Boats, and Airplanes (or This exception doesn't apply if the organiza- imal.
other statement containing the same informa- tion sells the vehicle at auction. In that case,
tion as Form 1098-C) you received from the or- you can't deduct the vehicle's FMV. Property Subject to a Debt
ganization. The Form 1098-C (or other state-
ment) will show the gross proceeds from the Example. B donates a used car to a quali- If you contribute property subject to a debt
sale of the vehicle. fied organization. They bought it 3 years ago for (such as a mortgage), you must reduce the
If you e-file your return, you must: $9,000. A used car guide shows the FMV for FMV of the property by:
• Attach Copy B of Form 1098-C to Form this type of car is $6,000. However, B gets a 1. Any allowable deduction for interest you
8453, U.S. Individual Income Tax Trans- Form 1098-C from the organization showing the paid (or will pay) that is attributable to any
mittal for an IRS e-file Return, and mail the car was sold for $2,900. Neither Exception 1 period after the contribution, and
forms to the IRS; or nor Exception 2 applies. If B itemizes their de-
• Include Copy B of Form 1098-C as a pdf ductions, they can deduct $2,900 for their dona- 2. If the property is a bond, the lesser of:
attachment if your software program allows tion. B must attach Form 1098-C and Form a. Any allowable deduction for interest
it. 8283, Noncash Charitable Contributions, to you paid (or will pay) to buy or carry
their tax return.
the bond that is attributable to any pe-
riod before the contribution; or
Page 8 Publication 526 (2022)