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Author: Lurker1999 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121567  
Subject: Fair market value for books, CDs, movies? Date: 5/6/2004 2:22 AM
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I'm trying to see if donating part of my large CD collection would make more financial sense than trying to sell it on half or secondspin. I've heard some people mention they deduct $2 per CD, etc. Can you do that if the CD is selling on half.com for $0.75 and not much more on Ebay/Amazon. Does that not become the fair market value? Also would you need to print out the search page for every CD to prove fair market value?
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Author: ptheland Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 71748 of 121567
Subject: Re: Fair market value for books, CDs, movies? Date: 5/6/2004 3:47 AM
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I'm trying to see if donating part of my large CD collection would make more financial sense than trying to sell it on half or secondspin.

Donating something can never make more financial sense than selling it for it's FMV.

The deduction for your donation cannot be more than it's FMV. Multiply your donation by your marginal tax rate (including state taxes if those are applicable), and you'll have your bottom-line financial benefit for donating. As long as tax rates are less than 100% (and for purposes of this discussion, I believe they are well below that threshold), your benefit from donating will be less than the FMV of the items donated.

Now, if you're not willing to take the time necessary to sell them at FMV (like write up the eBay/half/secondspin description, wait for bids to come in, collect money from winning bidders, and ship the items) then it might make sense to donate rather than sell. For example, if your preferred method for disposal would be to go to your local used CD store with a big box full of CD's and ask them to buy the whole lot, you'll probably get something less than a retail FMV. If what they offer is less than your benefit from donating, then donating makes more sense. Not entirely from a financial point of view, but from the combination of finance tempered with lifestyle choices.

I've heard some people mention they deduct $2 per CD, etc. Can you do that if the CD is selling on half.com for $0.75 and not much more on Ebay/Amazon. Does that not become the fair market value? Also would you need to print out the search page for every CD to prove fair market value?

It kind of depends on how much effort you want to go to in valuing the collection. Certainly, current print-outs of pages from one of those sites would reflect one kind of FMV. You could also head over to your local thrift shop and see what price they are getting for CD's.

I suspect the on-line sites will come up with a higher value for rare or desireable CD's, while using a thrift shop value of $1 or $1.50 or $2 (or whatever) would make more sense with less desirable titles. I'd go with whichever route gets you the higher deduction, while still keeping in the realm of reasonableness.

--Peter

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Author: irasmilo Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 71750 of 121567
Subject: Re: Fair market value for books, CDs, movies? Date: 5/6/2004 8:00 AM
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Donating something can never make more financial sense than selling it for it's FMV.

With one exception that is irrelevant to the original question... If you are going to make a donation, it is better to donate appreciated stock (or other capital assets) than it is to sell the stock and give the cash. By giving the stock, you avoid paying capital gains tax on the unrealized profit.

Ira

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Author: ptheland Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 71763 of 121567
Subject: Re: Fair market value for books, CDs, movies? Date: 5/7/2004 11:14 AM
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Good catch, Ira.

--Peter

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