Between the Lines

To the Editor

Correction

Corrections or additions?

These articles by Barbara Fox were published in U.S. 1 Newspaper on September 2, 1998. All rights reserved.

Bottom Line on Car Donations

It would be easy to use an overblown estimate of your

car’s value on your income tax. The charity does not legally have

to tell you how much or how little your car sold for, and the IRS

has as much as said it is not looking for such small pickings when

it does an audit. But do you even want to?

The American Cancer Society sent a letter saying that the fair market

value of my car was $4,050, based on my description of the condition

as "good" and without reference to any particular source.

The American Lung Association sent a more complete form valuing my

car at $3,750 at retail, or $2,450 for a trade-in, based on the N.A.D.A.

Official Used Car Guide and suggesting I should adjust this estimate

to "fair market value" based on options and condition. (They

hadn’t asked, and I hadn’t told them, that it didn’t have a working

radio or power windows and doors, and on and on.)

I could file either of these forms with my income tax and flourish

them at an audit, and the IRS would have a hard time proving that

my car was worth less. Much less.

When I checked with a car dealership and presented the whole sorry

picture (dents in the side, no power windows or doors, radio malfunctioning)

I learned it was termed "unsaleable" and worth only $1,200

as a trade-in.

So if I were in a 40 percent tax bracket and (falsely) claimed $4,000

retail value, 40 percent of $4,000 would mean $1,600 off on my tax

bill, compared to the $1,200 I would get for a trade in. My net profit

for this unrealistic claim: $400.

Nevertheless, my profit would shrink if I went out and bought a new

car. That’s because donations of a more expensive car can jeopardize

savings on the sales tax you get when you use the car as a trade-in.

In New Jersey, when you trade in a used car to buy a new car, you

pay sales tax only on the cash you hand over.

Here’s how it would work for me: If I buy a new car for $20,000, I

will pay $1,200 in state sales tax, $200 more than I would have paid

if I had used my old car as a trade-in. My net "profit" would

be $200 plus a very guilty conscience.

I don’t want a guilty conscience, and that’s one of several reasons

why I’m going to keep the car. When I decide to junk my clunker, I

might donate it, but not for profit on a tax deduction. If I go the

donation route, it will be because I like the charity.

— Barbara Fox

Top Of Page
Between the Lines

September’s Inc. Magazine jumped out at us as we were

putting together the final pieces of this issue of U.S. 1. The cover

story was called "Ben’s Big Flop," and it documented how Ben

Cohen — he of Ben & Jerry’s ice cream fame — had tried to

help save the Amazon rainforest though a for-profit company called

Community Products Inc. This cautionary tale of good intentions gone

sour makes an interesting comparison to this issue of U.S. 1, which

has a fistful of stories about nonprofits that funnel in-kind donations

to other nonprofits, and foundations that take advantage of the trend

in "relationship" marketing. See page 15 for Barbara Fox’s

reporting.

Another story in the September issue of Inc., "Divorce-Proofing

Your Company," didn’t seem as relevant — until we discovered

that it was focussed on Liza Price and Donn Rappaport and contained

a dissection of how their divorce affected their company, American

List Counsel, the 85-person firm on Orchard Road (http://www.amlist.com).

When U.S. 1 wrote about Price last summer (June 18, 1997), she was

immersed in her new role as founder of Amateur Golf Tournaments (http://www.amgolftour.com).

Price

wasn’t ready then to unpack the baggage of her divorce and the company

she lost, but both she and Rappaport cooperated with Inc. writer Stephanie

Gruner. The result is an apparently balanced account of the "golden

couple" who 10 years ago were "young, attractive, entrepreneurial,

and known for throwing great parties. Price’s risk-averse instincts

tempered Rappaport’s zeal for growth. Though often at odds on business

decisions, the pair both worked hard to run the company professionally."

This also is a cautionary tale, because Price and Rappaport are pictured

as doing everything right, distinguishing between their personal and

professional relationship from the beginning. What saved the company

was a partnership agreement with a "shotgun" clause that ruled

out stalemates.

Top Of Page
To the Editor

U.S. 1’S AUGUST 26 cover story by Chris Mario, "One Old House,

To Go," was informative and well written. But on page 46 it mentions

that the Plainsboro Historical Society was against the move of the

house to Memphis. That is not true. We believe in saving old houses,

even if they are moved out of state. We wish Jim Hollingsworth good

luck in his endeavor.

Bob Yuell

Plainsboro Historical Society

P.S. This house was owned by Princeton University, and we are

happy they gave Jim the opportunity to move it. This has not always

been the case, as they have a dismal record of tearing down old farm

houses and farm outbuildings.

Top Of Page
Correction

An August 26 story on an inch-thick collection of print ads, "High

Response Newspaper Advertising," failed to provide contact information

for the publisher, U.S. Institute of Marketing. Robert Steckel heads

the firm at 531 Fifth Street, Oakmont PA 15139, 412-828-2720 or 800-627-5384.


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