AOPA Plane Giveaway and Taxes

Except there the "blue book" on new property is the manufacturers list
price. Fair market value is the price the plane would bring on the open
market between willing sellers and buyer. IRS Pub 561.
http://www.irs.gov/pub/irs-pdf/p561.pdf#search='irs%20fair%20market%20value'

The challenge with a new plane loaded with expensive extras is that it
is unique so willing buyers may be few since they can buy the same plane
new and upgrade it as they choose making the fair market value approach
list prices.

"Ron Natalie" wrote in message
m...
TaxSrv wrote:

That ain't the IRS position. The number on Form 1099 is to be fair
market value, and indeed the value of all the "stuff" added may not
reflect final FMV, as other posters have noted.

I agree with Fred here. In the case of something like a "New Car"
the IRS will consider the value to be the MSRP. However since this
isn't the case, some acceptable appraisal technique (blue book,
etc...) will apply.

sfb wrote:
Except there the "blue book" on new property is the manufacturers list
price.

I said that. New items are valued at the MSRP (regardless of how
inflated that might be over what the actual VALUE of the item is).

The challenge with a new plane loaded with expensive extras is that it
is unique so willing buyers may be few since they can buy the same plane
new and upgrade it as they choose making the fair market value approach
list prices.

This is NOT a new aircraft. It's a 1974 aircraft that they've been
overhauling.

OK, the IRS says in Reg Sec. 1.74-1(a)(2) that the "taxable amount is the
prize's current Fair Market (resale) Value (FMV)". This is in Section 1384
of RIA's Federal Tax Handbook for 2005. So, you would be able to use a
competent Appraiser's appraisal for valuation purposes. Be forewarned that
you will probably be audited so you'd better have used a good appraisal.


Trip