Gould 0738 wrote:
The scores of charitable organizations around the country who rely on the
acquisition and resale of donated yachts have been scuttled by a bill passed by
Congress and signed by President Bush. (Disclosure, I used to work for such an
organization).

So have I... actually I usually say I worked "with" one such
organization since they didn't pay me anything.


Under the old law, a donor could deduct the "appraised value" of an asset
donated to charity. The law required vessels to be valued by an independent
marine surveyor, and additionally required that the surveyor be prepared to
defend the valuation using data commonly accepted within the industry.

And a lot of people skipped this step, or selected absurd valuations.

... In many
cases, boats were acquired through a mechanism known as a "bargain sale", in
which
the charitable organization could pay for a portion of the boat in cash and the
donor was allowed to take a tax write-off for the difference.

Never saw this done.


There was, undoubtedly, some abuse of such a system.

Ya think


Under the new law, the donor cannot deduct anything until the boat is resold by
the charity, and the donor will then be limited to a deduction equal to the
amount the boat brought when sold by the charity.

This same law will now apply to the "donate your car" programs that have become
so popular. Under those programs, donors are typically allowed to deduct the
retail blue book value of a donated vehicle and the charity then runs the cars
through a wholesale auto auction to get whatever they will bring. One veterans
organization in the NE reportedly raised $5mm from donated cars in the last
year.
Kiss 4.9 million of that good-bye.

Y'know what? If you look at charity funding in general under this
"compassionate conservative" administration, donations of all types are
way down. Many small charities have simply folded up, a lot of big ones
are surviving but barely, and on 25% or less of what they pulled in 5
years ago.



Funny move from an administration that claims it supports philanthropic giving
as an alternative to government social funding and claims it wants to reduce
taxes. This measure makes philanthropic giving far less attractive, not more,
and increases taxes on those who donate assets to charity.


Karl Denninger wrote:
There has been such RAMPANT abuse of this Chuck that it had to stop
SOMEWHERE.

Why? I thought part of the Republican ideal was to limit the amount
taken out of people's pockets by gov'mint.


I know of people who have abused this system. It was legal, but smelled
like dead fish.

The abuse might be rather stinky, but there was nothing wrong with the
system itself.


I for one am glad that this loophole was closed, because there was simply no
way to fix the old way it was being done.

?? Maybe to make people rationalize the amount of the deductions
relative to the valuation of the donated boat or car? I think this was
shooting mice with an elephant gun.

And a further observation... a problem neither of you has commented on.
It seems to me that this is only a problem if the market value of a
particular type or class of goods (cars, boats) is dropping, making it
attractive to donate rather than sell on the open market. It's been a
buyer's market for sailboats for a really long time now and it's only
going to get worse. Now you can't even give 'em away!

Personally, I expect the market for SUVs and camper/motor homes to
plummet, too.

Regards
Doug King