I donated my entire collection of track diagram line drawings for the MKT railroad and MKT structure construction blueprints to our local railroad museum recently, and a vintage oak rolltop desk to the regular museum to help outfit a "bank" they are trying to recreate.

I told them what I figured the collection of stuff was worth... and they're going to get back to me with a letter showing the value that I could use for income tax purposes.

Well, I went to have my taxes done and explained to the lady what I did and planned on using it for next years income taxes as a charitable deduction.

She said that unless it exceeded the standard deduction (of $12,000 filing single) that it wouldn't do me any good as a deduction.

So much for that....

As I understand it, if your itemized deductions on Sch. A exceed the standard deduction, then charitable deductions still help to reduce your taxable income. The overall result in raising the standard deduction has been a reduction in small donations from average folks. I'd imagine that once people know how the tax code changes work, that there could be even less donations in 2019 since it seems most think in terms of tax deduction instead of charitable giving.

Sorry for the thread drift....

If someone has spent a lifetime building up a collection, tax implications might be secondary when it comes time to downsize. When that time comes it is more important to find a good home for the material. That might mean naming a museum in your will.

To Other 501c3 museums, from what the museum I belong to has been told, Do not put value on the donation acceptance thank you letter/form. IRS wont accept it, donator has to supply value and be ready to justify $ value of an item (appraiser, or sale of equivalent item, i.e. similar item sold [not just listed] at $xxx.xx on eBay or at auction)

From what I have been told it is within the 501c3 rules, under non-monitary donation, can someone who is more familiar please verify. Again from what I have been told, the best the donation accepting group can do is guide the donator to venues, websites, publications or appraisers to help the donator obtain the justification of an item's value.

Be safe and steer wide around Bureaucratic Brewhahas.

The receiving charity is not allowed to give you an opinion of the value of your non-cash donation. You have to determine that yourself, with assistance that you might obtain, for income tax purposes. Also, you start by adding the value of the donation to any other deductions that you are entitled to use, and comparing that total to the standard deduction. Of course, there are other I.R.S. regulations that must also be followed.

We provide a Deed of Gift form with a thank you letter to demonstrate the ownership change. Neither determines value. That's between the donor and the IRS. We're not appraisers. If we determine the value, it's only for our own internal purposes i.e. insurance and whatnot.

This is exactly what I was projecting would happen. It would be educational for some museums to track donations for 2019 and 2020 and compare them to donations from 2018. As a director for my museum, I intend to do that and see if there is any noticeable difference.

This was a real nice operation in '72; the boiler jacket has obviously been replaced.

There was a real nice man that ran a small "Steam Powered" speeder; I went with him and locked all the switches.

I know the 113's engineer was a man named Louis Beekman.

113 was ran up to pressure, or nearly so, with a gas burner then switched over to oil.

The conundrum is that while we are not allowed to give a value to the donor, the IRS still wants us to provide a value of the donation on the 990. Well how would I know the value? We are a museum not an appraiser.

Maybe its time that we promote the idea that making contributions to nonprofits should be done for the benefit of the nonprofit instead of for some tax avoidance reason. We all made out very good with the new tax law because there is now a much higher threshold before we have to do the onerous counting of receipts to make it worth itemizing. For my family the standard deduction is $24,400 so we would need that much in deductions just to equal the standard, and itemizing only makes sense if I have deductions well above that number. I rarely do. Just the simplification of my life alone makes it worth it.

Promote donating for the good it does for the institution, not the personal pennies on the dollar tax benefit it may provide.

Rick: I have been involved with tax preparations for seniors in the past few years. It is the donor who submits what they honestly believe the donation is worth, not the recipient. When we accept articles from donors, they often ask, "what's it worth", and I will give them what I think is a true value, based on my experience, what I've seen at train shows, eBay, and potential resale. We always make certain the donor understands, surplus donations may be re-sold to raise funds for restoration work. Two examples from the past year have been a collection of high-end H-O trains, never out of the box, with decoders, sound systems, track, freight cars, which we resold for $500, but for which the donor requested a valuation of $900. We have a New Haven MU car headlight, in operational condition for which we're asking $700 at Springfield train show, end of this month. Donor simply said "take it out of my garage", but we valued it at $700.

Tax valuations do not necessarily mean the donor gets that amount back in hard dollars. It means a reduction in tax liability, and usually only a fraction of the donation estimate.

Rick:
The 990 does not ask for a value of an item that has been donated (hardware and artifacts). It only asks for total cash donations. So no need for the non-profit to come up with a value of a piece of hardware that has been donated.

As to the reasons why people make a donation of cash or hardware, yes this is a hot button item of mine as well. When you get right down to it, the true net value of an artifact or even a cash donation, unless its HUGE, is quite minimal on the part of the person making the donation. Key should be the interest in supporting the non-profit, or preservation of an artifact, rather than what it might do for your taxes.

This is why I tend to be a supporter of sponsorship approaches where the person making the payment sees something tangible with his name on it. Selling sponsorship of lamp posts, seats, automobiles, park benches, etc has its place and seems to work well if done properly.

I have made two fairly large cash donations over the years and neither were done based on what it saved me on my taxes. In both cases it was for the good of the cause, not to save some money on my taxes.

J.R.

I would be careful here... This is a recipe for hard feelings at the very least, and possible lawsuits, if the IRS disallows the deduction for the donation. On one of their web pages, the IRS specifically states:

"The donee organization is not a qualified appraiser for the purpose of valuing the donated property. For more information, get Publication 561, Determining the Value of Donated Property".

I would just advise the donor to Google "IRS Publication 561" and let them draw their own conclusions.

Very good suggestion, Dennis!

Disclaimer - I'm not a CPA or lawyer. I have prepared our taxes for the last seven years and did quite a bit of research when I set up the books. However, I have discussed some points with CPAs or others who are smarter than I.

Per the instructions for the 990, Part VIII, line 1, noncash contributions are reported at the time of the donation. A donation of goods must be reported as income at its fair market value. A contribution of services is not reported as income nor are volunteer services.

Our process for setting a fair market value is if an item is purchased for the organization and donated, we use the purchase price. For items which are donated by a vendor which offers the same item for sale, we use their retail price on the open market. We often ask vendors for an invoice showing the in-kind donation, but they often decline because its extra paperwork for them. If an item is donated for sale and sold before the end of the year, we use the price we sold it for. For the obscure items, we make our best estimate. When possible and particularly for items of significant value, we write a (usually) short statement for the record of how the value was determined (i.e., scrap value, Ebay for similar items, etc.). We don't typically invest much time in determining fair market value as it has no impact on our tax liability but we do try and come up with a realistic estimate. A significant part of our expenses are covered by in-kind donations and including them gives us and potential donors a more realistic picture of what has actually been invested than just documenting cash contributions and out-of-pocket expenses. Our estimate of fair market value is solely for our internal accounting purposes and we don't share it with the donor.

When we provide a receipt for an in-kind donation we describe the donation but don't state a value. We do include a statement saying that the IRS doesn't permit us to provide a value for items donated to us.

An interesting part of the tax regulations involves "works of art,historical treasures, and other similar assets as described in ASC 958-360-45." We determined our locomotive to be an historical treasure. This is documented in a memo to the record done when we were setting up our books and was supported by a resolution of the Board of Directors. As such, we did not put a value on the locomotive when it was contributed, don't show its value on balance sheets, and don't depreciate it. Financial statements all carry a footnote to this effect.

(added 1/8/19) The above applies only to non-profits that are required to submit their return on a Form 990. I don't have experience with the shorter forms of returns.

This discussion leads to something that I have told collectors for many years. I have been collecting builder's and number plates since 1963 and selling extras since 1968. Many collectors have told me that they are going to donate their collection to a museum. Many times the museum does not have the space and desire to have 50 number plates, a load of lanterns and some china. I have told them that most often the museum can use monetary funds to restore and preserve what they already have. I have advised them to sell the items on the open market themselves and then donate the extra funds. This is more work for the donor, but it makes it much easier for the museum to manage. I have also seen too many times over the years that some of the donated collectables disappear out the "back door".' This is becoming more of a concern as many collectors are getting older and they are looking to dispose of their collections. This is just something to think about in the artifact arena.