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discounted purchase of used equipment

  • 1.  discounted purchase of used equipment

    Posted 23 days ago
    Hey all:

    First time I have come across something of this nature. We have a company that is interested in gifting us a used farming plantar in whole or at a substantially reduced purchase price. Is there any way a reduced purchase price could qualify as a GIK? 


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    Matt
    mwichmer@gmail.com
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  • 2.  RE: discounted purchase of used equipment

    Posted 23 days ago
    Yes.  It is called a "Bargain Sale" and is described in IRS Publication 526.  You may claim as a gift (and the donor might be able to claim as a deduction) the difference between the established fair market value and what you paid for the equipment.  Note that your receipt must only reference the bargain sale and describe the equipment - do not reference a deductible amount.

    Note that it is very important that you have documented evidence of the FMV of the used equipment.  You cannot go by the owner stating what they think the equipment is worth.  However, if they cannot provide any proof, you likely can find recent sales of similar equipment on the Internet.  I did this once for a piece of veterinary medical equipment being donated to NC State.  The item I found online was sold for less than $500 different from what the donor of our equipment thought it was worth.  We recorded the gift internally using the sales price we found online.

    John


    John H. Taylor
    Principal
    John H. Taylor Consulting, LLC
    2604 Sevier St.
    Durham, NC   27705
    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987