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Value of Donated Assets

IRS rules that donated computer is worth $800, not $53,000.

• The Tax Court ruled that the value of a computer donated to a church was $800 rather than the $53,000 claimed by the donor. A computer technician began acquiring scrapped and obsolete parts from his employer, and assembled what appeared to be a "mainframe computer." He incurred only $800 in out-of-pocket expenses in constructing the computer. The technician donated the computer to a church. Some of the components of the computer were visibly labeled as "scrap". It took 4 months to complete the process of assembly, low-level diagnostics, and loading the software. The church kept the computer in a 10 by 13-foot room, with an air-conditioning system. A church member responsible for operating the computer encountered frequent problems. He was never able to run the computer for more than 30 to 45 minutes before encountering operating problems. The church kept the computer for approximately ...

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Posted:
  • September 1, 1992

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