Stan, being uncharacteristically stubborn, writes:
> My point was that if you're trying to calculate the Fair Market Value
> of something, you don't take a dealer's price ... any more than you
> take a car dealer's price to determine the value of a car you're donating!
> Instead, you have to determine the likely price you'd have gotten if you
> sold your equipment ... the Fair Market Value.
>
> IRS doc 561:
> Fair market value (FMV) is the price that
> property would sell for on the open market.
>
> Note that it doesn't say "the price you'd have to pay to replace it".
> In this case, the answer to the question "what would a dealer pay me for
> it" is one FMV data point. So is the answer to the question "what could
> I sell it for on eBay". So is the answer to the question "what could
> I sell it for to another user". All of those data points are going to be
> more interesting to the IRS than those derived from questions
> like "how much would I have to pay to replace it", and "how much did it
> cost". The latter two questions *are* useful ones to ask, and can have
> a bearing on determining the FMV in some cases, as explained by IRS
> doc 561.
You're misinterpreting the rules. The FMV is what the identical item would
sell for on the open market, exactly as the rules state. In other words, the
FMV is what the *school* would have to pay for it if it were to go out and
purchase it itself.
Secondly, you're being too technical and attributing too much concern to the
IRS. They're not as picky as you're giving them credit. So long as you can
document that other systems were being sold at the same price at you're
claiming at the same time, in the same functional state, that's perfectly all
right with them. What they obviously don't want you to do is claim a $50,000
deduction for a worthless pile of non-functional sheet metal or to write down
double or triple the estimated value of the machinery over its true FMV.
Getting three price quotes for your system from three reputable used computer
dealers and claiming the average of the three as your deduction is a
perfectly safe and valid procedure.
Wirt Atmar
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