There's a significant difference in these two statements and their meaning:
". . . I'll deduct $5000 from taxes."
vs.
"The tax code allows a percentage of that $5000 I will declare."
KL
Armor/AFV
For discussions on tanks, artillery, jeeps, etc.
For discussions on tanks, artillery, jeeps, etc.
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Hobby Collectibles => Profit?
KurtLaughlin
Pennsylvania, United States
Joined: January 18, 2003
KitMaker: 2,402 posts
Armorama: 2,377 posts
Joined: January 18, 2003
KitMaker: 2,402 posts
Armorama: 2,377 posts
Posted: Thursday, October 27, 2016 - 09:14 PM UTC
Kevlar06
Washington, United States
Joined: March 15, 2009
KitMaker: 3,670 posts
Armorama: 2,052 posts
Joined: March 15, 2009
KitMaker: 3,670 posts
Armorama: 2,052 posts
Posted: Friday, October 28, 2016 - 12:26 AM UTC
Quoted Text
Quoted TextQuoted TextQuoted TextS.In the past year alone, I donated over 200 kits to military charities of which I'll deduct $5000 from taxes. Comes out to $25 a kit...which I think is pretty conservative/generous.
Having sold a like number of kits recently (on line, Ebay, and at shows) I would say that the average market price for a 1/35 kit is much closer to $20. You might want to consider what the IRS thinks about the subject.
KL
Not sure what tax code he's going by either-- you can declare cash donations up to full value, but donations of 2nd hand goods is only $500 for private citizens, more for businesses for Federal Tax-- maybe that's what he means. As a person who has done a lot of model trading over the years (2nd hand trading is the only way I "buy" a new kit anymore), I can tell you nobody in sales is going to give you more than wholesale price on any kit-- and a rule of thumb is wholesale is anywhere from 1/3 to 1/2 the MSRP. I agree Kurt, about $20 for a run of the mill 1/35 kit is more like it-- there are a few exceptions, and for those I suggest going on eBay. I've seen one or two folks get away with outrageous dollar amounts for certain kits there, but that's not the normal case. It always ticks me off at shows when someone brings up eBay to "quote" a price. Just because it's on eBay at $XX.XX dollar amount doesn't mean that's what it will sell for. Most smart shoppers walk away from people that do that. When I worked in a LHS, about 1/3 of our monthly sale base was on eBay-- we were able to keep doing that because we offered fair prices, not outrageous ones. Occasionally we'd get really rare pricey kits in trades that went for higher prices (Model Hiro and Pocher car kits or Gunze Armor kits for example) and we could ask a lot more for them, but if we wanted to sell them we tried to stay reasonable.
VR, Russ
My intentions in having the charities provide me with receipts for the donations is to take full advantage of maximum deductions when donating 2nd hand goods. The $5000 worth of kits donated take up the entire spectrum of pricing: from the $125 for a BR52, all the way down to a $10 accessories kit. I simply took an average of the over 200 1/35 kits donated. The 2 organizations I sent kits to (for military vets in Iraq and Afghanistan) are in Arizona and Virginia and are well aware of limitations. In fact they both responded that I should value the kits higher. The tax code allows a percentage of that $5000 I will declare. I know cash donations can be fully valued/deducted: the wife and I do that when we pay 'donations' for classic car/Corvette shows that are 501 (c) (3) organizations. Those receipts are kept as well and add up quickly when tons of car shows ask at a minimum $25 to enter. Doing 10 shows adds up quickly. While I understand and appreciate your concerns when it comes to the Tax Man, rest assured I've done this a time or two. There is no excessive exploitation, just simple math when donating. I'm a 22 year retired military Veteran and only donate to military related organizations. Cash donations also go to military organizations, and since my step daughter and myself have diabetes, we donate cash to those organizations. More recently, I found out I have aggressive prostate cancer as a result of Agent Orange, so now I add those organizations to my list of cash donations. I think I explained myself enough, eh?
Just be aware there are guidelines published for charitable donations, and what qualifies in IRS publication 526 and by filing IRS form 8283. While $5000 is the limit for certain donations, any non cash donation claimed above $500 may require a Fair Market Value determination (FMV). This is usually done through an appraisal process, or by documentation through published prices or vendors-- not by receipts from the charitable organization-- they can write anything they want, it does'nt make it valid. Without valid documentation you are open to audit. $500 is the limit for undocumented donations. Just because you've done this a few times doesn't mean an IRS auditor won't catch a mistake, and excessive non-cash charitable donations is one of the main triggers for an audit. You sound like a disabled Vet, I too am a disabled Vet with 30 years of service, but take it from a person who has learned the hard way, I now use a tax professional for my filing requirements and my guy is a retired IRS auditor. I've been over charitable donations with him many times. You may know all this info already, but folks that don't should consult a tax professional or be very familiar with the rules when making a tax deduction for charity. You may claim $5,000, but that may not be what you get back, and you may be unpleasantly surprised if an auditor shows up one day asking for your documentation. Fortunately I had mine, seven years of records is the rule.
VR, Russ
ltb073
New York, United States
Joined: March 08, 2010
KitMaker: 3,662 posts
Armorama: 3,078 posts
Joined: March 08, 2010
KitMaker: 3,662 posts
Armorama: 3,078 posts
Posted: Friday, October 28, 2016 - 04:31 AM UTC
Guns actual working firearms!
I buy cheap form people selling their collections or the 1or 2 that they have because they don't want to pay the license renewal fees that our wonderful government now imposes, and I hold on to them until I hear that someone is looking for the make and model that I have. Never lost money alway made a profit or broke even if I wanted to give someone a deal.
But then I see that you are from California so that might be even more difficult for you than it is for me here in the Republic of NewYork
I buy cheap form people selling their collections or the 1or 2 that they have because they don't want to pay the license renewal fees that our wonderful government now imposes, and I hold on to them until I hear that someone is looking for the make and model that I have. Never lost money alway made a profit or broke even if I wanted to give someone a deal.
But then I see that you are from California so that might be even more difficult for you than it is for me here in the Republic of NewYork
Vemmadave
Alberta, Canada
Joined: April 17, 2013
KitMaker: 44 posts
Armorama: 40 posts
Joined: April 17, 2013
KitMaker: 44 posts
Armorama: 40 posts
Posted: Friday, October 28, 2016 - 07:07 AM UTC
I am learning Ebay/Amazon to not only have access to more products in the hobby but sell some as well. I know full well that their is a flood of people selling hobby stuff out there and trying to get rid of their stash too. I am learning and growing as well and having fun doing it. Meeting new people through some sales but I won't give up. I am learning to sell outside the hobby too. I collected over the years my work schedule makes it hard to focus (Night shift) but I don't make excuses. Yes their is profit other cultures outside north america has more young people doing the hobby we need to get it going here in North America so young people have more skills than just staring at a smart phone!