To: Kassie Marlin
Prepared by: Mackenzie Rider
Date: December 5, 2023
Re: Deducting donated vehicle to qualified domestic charitable organization
FACTS
The relevant facts of the situation are as follows:
1. The fair market value of the car at the time of the contribution is $2,650.
2. Ms. Marlin has no current/prior association with Meals on Wheels.
3. Ms. Marlin is considering donating her personal automobile to Meals on Wheels, a
qualified domestic charitable organization.
4. A receipt of fair value of car will be provided.
5. Meals on Wheels will use the car to deliver meals.
QUESTION
Can Ms. Marlin deduct the car she if she donates it to Meals on Wheels? If so, how much can she
deduct?
CONCLUSION
Ms. Marlin can deduct the car if she donates it to Meals on Wheels. She can deduct $2,650
minus any gain that she may have received from selling it. If not gain she can deduct the FMV.
ANALYSIS
A. IRC Sec. 170 (a):
“There shall be allowed as a deduction any charitable contribution (as defined in
subsection (c)) payment of which is made within the taxable year. A charitable
contribution shall be allowable as a deduction only if verified under regulations
prescribed by the Secretary.”
The clear language of Sec. 170 (a) is inclusive of all types of donations as long as they
are to a charitable organization.
B. The question then turns to the definition of how much you can deduct from a charitable
contribution. As set forth in Sec. 170 (b) you are allowed a deduction to the extent that
the contribution does not exceed 50 percent of the taxpayer’s contribution based for the
taxable year.
The term contribution base defined for the purpose of this section means “adjusted gross
income (computed without regard to any net operating loss carryback to the taxable year”
C. The fair market value of the car at the time of the contribution is $2,650 which does not
exceed 50 percent of the Ms. Marlins contribution base for the taxable year.
D. The question then turns to what the property will be used for once it is donated. As set
forth in IRC 170 (e 3i):
“The use of the property by the donee is related to the purpose or function constituting
the basis for its exemption under section 501 and the property is to be used by the done
solely for the care of the ill, the needy, or infants.”
The property will be used to deliver meals to the needy.
E. The final step in the analysis is to determine how much Ms. Marlin can deduct.
According to Sec 170 (e) for charitable gifts of ordinary income-type property, the
property's fair market value (FMV), must be reduced by the amount which would have
been recognized as gain other than long-term capital gain if the property had been sold by
the donor for its then FMV.
To: Kassie Marlin
Prepared by: Mackenzie Rider
Date: November 16, 2023
Re: Deducting donated vehicle to qualified domestic charitable
organization
Format: 5
Conclusion: 0
Analysis: 5
Total: 10/20
FACTS
The relevant facts of the situation are as follows:
6. The fair market value of the car at the time of the contribution is $2,650.
7. Kassie Marlin has no current/prior association with Meals on Wheels.
ASSUMPTIONS (I would move these items to the facts section and eliminate assumptions.)
I have made the following assumptions:
1. A receipt of fair value of car will be provided.
2. Meals on Wheels will use the car to deliver meals.
QUESTIONS
Can Ms. Marlin deduct the car she donated to Meals on Wheels?
ANALYSIS
A. The Federal Tax Handbook paragraph which provides secondary authority is:
The client inquiry deals with the deductibility of the car she donated to Meals on Wheels,
a qualified domestic charitable organization. The Federal Tax Handbook paragraph
which deals with this issue is paragraph 2106.
B. The primary Code section that deals with this question is:
The primary IRC section dealing with this question is section 170A-1.
C. The donation of the car is deductible.
The analysis section needs some work. Please see the sample detailed outline in the tax research
guide. Also, you should only be using primary authorities (code section). Lastly, you are missing
a conclusion section.
Client: Kassie Marlin
Prepared by: Mackenzie Rider
Date: October 10, 2023
IRC: 2
FTH: 2
Tone: 3
Completeness: 2
Relevance: 3
Total: 12/15
1. The Federal Tax Handbook paragraph which
provides secondary authority is:
The client inquiry deals with the deductibility of the car
she donated to Meals on Wheels, a qualified domestic charitable organization. The Federal Tax
Handbook paragraph which deals with this issue is paragraph 2106.
2. The primary Code section that deals with this question is:
The primary IRC section dealing with this question is section 170A-1.
3. Questions to get the additional facts I will need to respond to this inquiry are:
a. Do you have any association with Meals on Wheels other than the donation of your car? (No,
she does not.)
Reason: If so, does the car really trade hands if you still may be using it. (Question is valid, but
reasoning is not.)
b. What is the fair market value of the car at the time of the contribution? (The car has a FMV of
$2,650.)
Reason: This is the measure of the maximum amount that can be deducted
Generally on the right track, but missing a few questions.
1. Will they provide a receipt? (Assume they will provide.)
2. Will they use the car or sell it? (Assume they will use it to deliver meals.)