rfn026

A lot of you know I write a lot about auctions and such but this is a new one. It's very simple and effective.

Put your race car into a 501c3 non profit foundation.

When the car is sold the buyer can deduct the amount as a charitable contribution.Exactly how much will depend on the buyer's tax bracket. It could be substantial though.



Here's the web site.

Almost all of the major car collectors in the United States have a 501c3. They take their personal collector cars and donate them to their foundation. That gives them a nice tax deduction.

This is the first time I've seen it with race cars. Then again I haven't been paying a lot of attention.

Richard Newton

rbl

I'll form a 501C3 and start by accepting all of your cars ... how does that work for you?

acrace

Richard . . . Interesting idea. But wouldn't the buyer be able to claim as a charitable contribution only the portion of the transaction above the FMV of the goods, and not the entire amount? Probably need to consult a tax advisor . . .

rfn026

You're going to have to talk to your CPA about that one.

Richard Newton

2 GTOs

The value of the deduction depends on what the charity does with the car. If they sell the car, that is the amount you can deduct. If they use the car in the business, you would deduct the fair market value of the car. To the extent the donee has any use of the car, I'm gonna guess that it would reduce any charitable deduction.

There would need to be substance to it. The only way I could see this remotely working, is if the organization is a car museum for example, but I would think you would need to open to the public etc. And probably could not be viewed as using it for personal benefit and the entity would likely also have a statutory filing requirement to complicate things. Might be something to consider if you were buying high end show cars, were open to the public for viewing periodically, and were willing to deal with the formalities. Not to mention the strength to fend off the IRS under challenge.

Sounds like fun cocktail party talk nonetheless. I would tread carefully.