Fair Market Value of Celebrity donated auction items


P

Pamela Rucker

What is the deductible amount, if any, for an item, such as
a musical instrument, signed by a celebrity that is
auctioned for more than the cost of the instrument without
the signature? I would think that the "fair market value" of
a celebrity signed guitar is the amount that it sells for at
the auction and therefore, there is no deduction to the
buyer.

Is that unfair? No, the buyer received a celebrity signed
guitar, not just a plain guitar.

I've been contacted by a television show that is putting
together a "VIP package" to see the show for a donation to
charity and I've advised them that the fair market value
will be the auction price so they should not indicate in the
publicity that it will be tax deductible to the purchasers.
They have been told they only break out the cost of the
items in the package (limo, meal, etc.) and the extra
benefit of VIP seats, backstage visit and introduction on
the show has no value.

Thanks for your thoughts.
 
Last edited by a moderator:
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P

Paul Thomas, CPA

Pamela Rucker said:
What is the deductible amount, if any, for an item, such as
a musical instrument, signed by a celebrity that is
auctioned for more than the cost of the instrument without
the signature? I would think that the "fair market value" of
a celebrity signed guitar is the amount that it sells for at
the auction and therefore, there is no deduction to the
buyer.

Is that unfair? No, the buyer received a celebrity signed
guitar, not just a plain guitar.

I've been contacted by a television show that is putting
together a "VIP package" to see the show for a donation to
charity and I've advised them that the fair market value
will be the auction price so they should not indicate in the
publicity that it will be tax deductible to the purchasers.
They have been told they only break out the cost of the
items in the package (limo, meal, etc.) and the extra
benefit of VIP seats, backstage visit and introduction on
the show has no value.
Can anyone buy VIP seat tickets, backstage passes, and an
introduction on the show? If so, that is the market value
(what is being charged).

If not, then the amount above the ticketed price for the
limo/meal, etc that have a determinable value get counted.
 
Last edited by a moderator:
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S

Seth Breidbart

Paul Thomas said:
Can anyone buy VIP seat tickets, backstage passes, and an
introduction on the show? If so, that is the market value
(what is being charged).

If not, then the amount above the ticketed price for the
limo/meal, etc that have a determinable value get counted.
Then what about the stuff that doesn't? It seems to me it
should get counted at its market value, namely the price
received at auction.

Seth
 
Last edited by a moderator:

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