AOPA Plane Giveaway and Taxes

In a previous article, said:
The fact that AOPA didn't pay for upgrades is meaningless when
calculating market value. If an owner inherits a plane, is worth less
than if he or she had purchased it? Actual market value has nothing
to do with what one particular owner paid for the item.

No, but adding $250,000 worth of stuff to a $100,000 aircraft does not
make it worth $350,000. Because when it comes down to it, it's still a
competing on the market with $100,000 aircraft with similar capabilities.

--
Paul Tomblin http://xcski.com/blogs/pt/
Will debug C homework for lap dances.
-- Mike Looney

"B A R R Y" wrote in message
...
On Sun, 27 Nov 2005 22:41:50 +0000 (UTC),
(Paul Tomblin) wrote:

No, but adding $250,000 worth of stuff to a $100,000 aircraft does not
make it worth $350,000. Because when it comes down to it, it's still a
competing on the market with $100,000 aircraft with similar capabilities.

Or it's competing with a NEWER aircraft.

To use easily followed examples, what's a NEW Cherokee or 172 go for,
compared to a 30 year old, all original version? The 30 year old,
with kick-ass electronics, freshened up propulsion, and a new interior
and paint very well may hit 75-80% of the new one's price.

On what planet? Do you even know what a new 172 costs?

That doesn't effect the amount of taxes you pay on it, just when you
pay the taxes.

Paul Tomblin wrote:

So do they valuate the aircraft at the fair market value (ie. what a
normal Commander 112 of that age would fetch), or do they add all the
ridiculously expensive add-ons (none of which AOPA actually pays for,
since it's free advertising for the supplier) to that price and value it
at an amount that you'd never be able to sell the plane for in a million
years?

Basically, you're stuck with what they paid for the plane, plus the price of all
the add-ons. Just as if you bought the plane for that price and paid to have all
that work done. You can try getting an appraiser to produce a value for the
plane, but that won't fly with the State of New Jersey (dunno about the Feds).

The only way I know to pay taxes on a lower value is to sell the plane for less.
Selling the plane automatically determines the market value.

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

"George Patterson" wrote:
Basically, you're stuck with what they paid for the plane, plus
the price of all
the add-ons. Just as if you bought the plane for that price and
paid to have all
that work done. You can try getting an appraiser to produce a
value for the
plane, but that won't fly with the State of New Jersey (dunno
about the Feds).


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. What does often
happen with issuers of 1099s is they think if they don't put an
"optimum value" on the 1099, they get into trouble with IRS.
Nonsense, as they have no enforcement program for this on the payer
side, and in fact IRS would rather not get into audit hassles where
the winner claims a justified, lesser value on Form 1040.

Fred F.

Just because you stuff new stuff inside doesn't change the fact that the
airframe is xx-years old.
Last I checked, an xx-year old airframe doesn't have the same value as
one fresh out of the factory.
Likewise, the value of the new stuff stuffed inside the xx-year old
airframe won't have the same value as the same stuff in a box on the
shops shelf.
Once installed, it becomes used equipment and is devalued accordingly.

Sure that isn't two separate and distinct transactions - winning and
then selling at a capital loss unless you are 81mm who doesn't think the
IRS exists.

"George Patterson" wrote in message
news:zTtif.763$iZ3.401@trndny03...
Paul Tomblin wrote:

So do they valuate the aircraft at the fair market value (ie. what a
normal Commander 112 of that age would fetch), or do they add all the
ridiculously expensive add-ons (none of which AOPA actually pays for,
since it's free advertising for the supplier) to that price and value
it
at an amount that you'd never be able to sell the plane for in a
million
years?

Basically, you're stuck with what they paid for the plane, plus the
price of all the add-ons. Just as if you bought the plane for that
price and paid to have all that work done. You can try getting an
appraiser to produce a value for the plane, but that won't fly with
the State of New Jersey (dunno about the Feds).

The only way I know to pay taxes on a lower value is to sell the plane
for less. Selling the plane automatically determines the market value.

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

john smith wrote:
Just because you stuff new stuff inside doesn't change the fact that the
airframe is xx-years old.
Last I checked, an xx-year old airframe doesn't have the same value as
one fresh out of the factory.
Likewise, the value of the new stuff stuffed inside the xx-year old
airframe won't have the same value as the same stuff in a box on the
shops shelf.
Once installed, it becomes used equipment and is devalued accordingly.

Sure, but the airplane is still worth a lot more than an unupgraded
airplane of the same model and vintage.

Matt

If it pushes you into the AMT it could a lot.


"Jon Kraus" wrote in message
m...
Does anyone know if there would be tax consequences for the lucky winner
of the AOPA Commander 112. Thanks!!

Jon Kraus
'79 Mooney 201
4443H @ TYQ

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.