Re: Coil for sale - return on assets vs prudence

["Tesla list" <tesla-at-pupman-dot-com>]

Original poster: "Jim Lux by way of Terry Fritz <twftesla-at-qwest-dot-net>" <jimlux-at-earthlink-dot-net>


> 
> Original poster: "Vanderputten, Gary by way of Terry Fritz
<twftesla-at-qwest-dot-net>" <gvp-at-pvaintl-dot-com>
> 
> I think that this sale underscores several realities of recycling:
> 1) Look at all the work and resourcefulness that this coil embodies and
> consider that the builder may only get a few thousand dollars for all his
> efforts.
> 2) In the wrong hands it can kill -- I believe that the only prudent path
> for coilers is by building; only then will you have the respect for the
> power of these devices.
> This spectacular device could, and should, be safely given to an appropriate
> institution for a sizable tax write-off.
> 

Admittedly, my knowledge of tax law is sketchy, but I suspect that you'd
have a hard time establishing a "sizable" cost basis for the donation.
You'd also have to have extensive documentation of the acquisition cost of
your parts (with depreciation, etc.).  

Fact of the matter is, I suspect that you can't scrounge up components in
junk yards, pay little or nothing, and then donate them to some charity and
claim a value greater than you paid.  Or, if you do, you're going to pay
income tax on the capital gain.

There are some ways to donate your "time", which clearly has value, but
you'd have to have explicit records, and I suspect that the rules are
written more in terms of you punching a time clock at the charity, rather
than toiling in your garage.


Here's a comparable situation.  A painter goes out and buys a canvas and
paints, fairly cheaply.  Toils in a garrett for a year producing a
masterpiece.  Donates masterpiece to museum.  Does the painter get a
deduction for toil?  I think not.  However, if the painter sells the
painting to someone for a million dollars, then gives the million dollars
to the museum, there would be a deduction for the million, but, on the
other hand, there'd also be a million dollars income to offset, so the sum
is still zero.


I think the basic guideline is that you have to have paid taxes on the
value (be it your income, good fortune, etc.) of what you're donating to
get the deduction.