Tuesday, July 14, 2015

How to donate used bikes (and why that may beat selling them)

In the Twin Cities we have a number of places that accept bike donations, fix them up, and sell them. They use the money to fund community activities and provide selected donations.

if you’re fortunate enough to be in a high tax bracket, the deduction may be competitive with what you’d get selling the 2nd hand bike to a local shop. You’d get more if you could find a direct buyer, but that’s work. Second hand bike shops don’t offer much for a used bike, though they sell them for more than I’d expect.

If you do donate you need to know the $250 (single transaction) and $500 (yearly total rules). If you are over $250 you need a record of the donation; the shop provides that, along with proof of tax status - so that’s no problem. (No point in trying to split donations.) If you are over $500 for the year (easy to do) you need to complete Form 8283 so you’ll need records for EACH donated item of:

  1. Donee organization
  2. Property description
  3. Date contribution
  4. Date acquisition and how it was acquired (getting harder!)
  5. Cost at time of acquisition
  6. Fair Market value at time of donation  and method used to determine (recipient can’t help, I compared items to price of similar items on sale and used that value).

Yes, bit of a pain if you don’t know ahead of time. I use a Google Sheet to enter data, print it out, stick receipt on it, then toss it in the box.

No comments: