Quote:
Originally Posted by egbeachley
In the example given, if you buy something for 25 cents, find out it's worth $10,000 and donate it, you have in essence 2 separate transactions; income of $10,000 and then a donation of $10,000. You don't get to pick the $10,000 donation and conveniently ignore the income piece.
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I still don't follow how you have income earned if its a donation? If I donate something worth $10,000, how did I realize any income on that item? I gave it away for free, regardless of the value. I, as well as probably countless others, donate clothing to the Salvation Army every year. I don't have to declare the FMV of my clothing donation as income.