AOPA Plane Giveaway and Taxes

IRS pub 561 puts the responsibility for the appraisal on you and the IRS
is not obligated to accept the appraisal without question. Despite the
magic of the 1998 act, the taxpayer still retains much of the burden of
burden of proof with regard to fair market value.

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

The IRS has no basis in case law to enforce MSRP on a car, and
since IRS examination employees buy new cars, they are well aware
what negotiated prices are. The difficulty with arguing FMV on an
airplane is that they may not accept just one appraisal submitted
by the taxpayer. However, since 1998, IRS will have the burden of
proof on this one, so that settlement in an appeals conference
shouldn't be too difficult.

Fred F.

This is an interesting discussion I would like to see what the consensus
think this AOPA bird is really worth.

The lower powered 112 does not sell as well as the 114 but just a few hours
since SMOH, new paint and nice new interior may have the AOPA birds value up
to around $100,000.
Now add the turbo normalize, and all the fancy new instruments and avionic
glass might add say $50,000.
So I will start the ball rolling and say it will be worth about $150,000 on
the open market.

Incidentally, the AOPA guy who flies it around told me at OSH that it was a
low powered dog and he would prefer his own Comanche !
But it did not have the turbo normalizer on at that point.
I just wish it would come my way !!!

So how far away am I with my valuation of $150,000 ????

--
Roy
N5804F Piper Archer

"I have had some bad landings but I have never missed the runway"


"sfb" wrote in message news:H3Fif.3507$P33.1126@trnddc01...
IRS pub 561 puts the responsibility for the appraisal on you and the IRS
is not obligated to accept the appraisal without question. Despite the
magic of the 1998 act, the taxpayer still retains much of the burden of
burden of proof with regard to fair market value.

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

The IRS has no basis in case law to enforce MSRP on a car, and
since IRS examination employees buy new cars, they are well aware
what negotiated prices are. The difficulty with arguing FMV on an
airplane is that they may not accept just one appraisal submitted
by the taxpayer. However, since 1998, IRS will have the burden of
proof on this one, so that settlement in an appeals conference
shouldn't be too difficult.

Fred F.

In article et,
"Roy Page" wrote:

This is an interesting discussion I would like to see what the consensus
think this AOPA bird is really worth.

The lower powered 112 does not sell as well as the 114 but just a few hours
since SMOH, new paint and nice new interior may have the AOPA birds value up
to around $100,000.
Now add the turbo normalize, and all the fancy new instruments and avionic
glass might add say $50,000.
So I will start the ball rolling and say it will be worth about $150,000 on
the open market.

Too high!
$110k - $120k

john smith wrote:

Too high!
$110k - $120k

You guys remind me of the airport bums who argued vehemently that Cessna would
never be able to get $125,000 for a new 172.

George Patterson
Coffee is only a way of stealing time that should by rights belong to
your slightly older self.

"sfb" wrote in message
news:H3Fif.3507$P33.1126@trnddc01...
IRS pub 561 puts the responsibility for the appraisal on you
and the IRS is not obligated to accept the appraisal without
question. Despite the magic of the 1998 act, the taxpayer still
retains much of the burden of burden of proof with regard to
fair market value.


Since when is an IRS Pub legal authority vs. mere plain-language
guidance? The burden will indeed shift to IRS at some point in the
dispute process.

Of practical significance is where the t/p secures an appraisal to
determine the amount to be reported, but the 1099 has significantly
more. If the IRS audits and determines that AOPA didn't use an
appraisal for the 1099, then I'm afraid they don't have much of a
case. They may try to argue that AOPA knows airplanes, but that
doesn't make them a qualified appraiser. Sounds like favorable
settlement material to me.

Fred F.

How about if you put it up on e-bay with a $10,000 minimum and make the
hidden reserve $750,000. The low ballers will creep bid the thing up to
$40,000 and some sniper will bid another $10,000 in the final seconds.
Auction ends with the highest bid at $50,000, but you don't have to sell
it because they don't make the reserve. Fair Market Value? Why not?
Doubts about a one-time auction? Do it twice and average the 2 highest
ending bids. Lower the reserve on the second auction to $740,000. You
followed ALL the rules.

I don't believe e-bay auctions have ever been used to establish FMV.
What better way short of actually selling the beast can you establish
what the public will pay????? With a house, the appraiser's opinion does
not mean a hill of beans. The selling price establishes value.

Holes in this theory?(I'm sure there are PLENTY).
Thanks,
Mike

FMV requires a willing buyer and seller and this seller doesn't sound
like a willing. Getting buyers to lowball bids proves nothing.

"Mike Spera" wrote in message
ink.net...


How about if you put it up on e-bay with a $10,000 minimum and make
the hidden reserve $750,000. The low ballers will creep bid the thing
up to $40,000 and some sniper will bid another $10,000 in the final
seconds. Auction ends with the highest bid at $50,000, but you don't
have to sell it because they don't make the reserve. Fair Market
Value? Why not? Doubts about a one-time auction? Do it twice and
average the 2 highest ending bids. Lower the reserve on the second
auction to $740,000. You followed ALL the rules.

I don't believe e-bay auctions have ever been used to establish FMV.
What better way short of actually selling the beast can you establish
what the public will pay????? With a house, the appraiser's opinion
does not mean a hill of beans. The selling price establishes value.

Holes in this theory?(I'm sure there are PLENTY).
Thanks,
Mike

O.K. How do you indicate your willingness to sell? Maybe, put it up for
sale via auction and then go through it to the end (multiple times)? You
pay the e-bay fees. What more might you need to do to show you are
trying to sell the beast?

Willing buyers? Well, bidding on e-bay is a contract. Regardless of the
size of the bid, the act of bidding in a binding auction might show
willingness. No?

Other opinions?
Mike

FMV requires a willing buyer and seller and this seller doesn't sound
like a willing. Getting buyers to lowball bids proves nothing.

"Mike Spera" wrote in message
ink.net...


How about if you put it up on e-bay with a $10,000 minimum and make
the hidden reserve $750,000. The low ballers will creep bid the thing
up to $40,000 and some sniper will bid another $10,000 in the final
seconds. Auction ends with the highest bid at $50,000, but you don't
have to sell it because they don't make the reserve. Fair Market
Value? Why not? Doubts about a one-time auction? Do it twice and
average the 2 highest ending bids. Lower the reserve on the second
auction to $740,000. You followed ALL the rules.

I don't believe e-bay auctions have ever been used to establish FMV.
What better way short of actually selling the beast can you establish
what the public will pay????? With a house, the appraiser's opinion
does not mean a hill of beans. The selling price establishes value.

Holes in this theory?(I'm sure there are PLENTY).
Thanks,
Mike

"MS" == Mike Spera writes:

MS Holes in this theory?(I'm sure there are PLENTY).

No transaction took place, so the market value was never established.
Bzzzzztt!!!