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From: dgh@sun.uucp (David Hough)
Newsgroups: net.taxes
Subject: Re: US Charitable Donation deduction rules
Message-ID: <2082@sun.uucp>
Date: Tue, 26-Mar-85 22:57:08 EST
Article-I.D.: sun.2082
Posted: Tue Mar 26 22:57:08 1985
Date-Received: Fri, 29-Mar-85 06:01:13 EST
References: <12145@watmath.UUCP>
Reply-To: dgh@sun.UUCP (David Hough)
Organization: Sun Microsystems, Inc.
Lines: 24
Summary: 

In article <12145@watmath.UUCP> jmsellens@watmath.UUCP (John M Sellens) writes:

>For example, suppose AT&T had some software that they offered for sale at
>$10,000 a pop.  But nobody wanted it, because it wasn't particularly good.
>Does this mean that AT&T could give this useless junk to all the not for
>profit organizations that it could find and get a whole slew of $10,000
>deductions?  If so, this would be a handy way to reduce their taxable income
>to a much smaller amount.  This is in effect getting a deduction for giving
>up the profit that you wouldn't have made anyhow.

	People used to inflate the value of their charitable contributions
routinely.  The law limits the deduction to fair market value, however,
and I think that part of the 84 tax increase requires written appraisals
for substantial gifts without obvious fair market value, with 
substantial penalties for inflated deductions, along the lines of those
applied to tax shelters.  I don't know about corporations, but individuals
are limited to a charitable contribution deduction that can not exceed a
certain percentage of adjusted gross income --- I don't remember the 
details.

	The moral would seem to be to donate software AFTER you realize
it's worthless but BEFORE anyone else does.

David Hough