Recording a loss on sale of business property donated to charity
I may be off base here, but I have a separate question regarding that earlier post I did tonight about the $10,000 charitable auto donation. The vehicle was purchased for $23,628 during Feb 2007. It was a Lincoln Town Car used for a Schedule C Limousine Driver business. It was purchased outright, it was not financed. Donated to charity because of a flood on 8/28/07. This flood was due to the tornado that happened in NYC in 8/07. I have the form 1098-C equivalent from the charity saying the car's gross proceeds were $10,000 Would the difference of $13,628 ($23,628 price less $10,000 charitable donation) be treated as a loss on Form 4797 Line 10 since it was held less than a year? Are items donated to charity that can no longer be used for business purposed treated as a sale for the charitable amount and then the difference recorded as a loss on Form 4797? I don't think that is right as it was not a sale of business property, but that was my first thought. Or would it be a casualty loss on Form 4684 for the difference of the $13,628. I think this makes more sense since the casualty was due to the tornado and there was no actual sale, it was a charitable donation as a result of the tornado. Or, is it something totally different? As I was entering the car on Schedule C, I realized it would not allow any depreciation because I put the end date as 8/07. I think there should be some sort of loss because the total outlay was $23,628 and between the charitable donation of $10,000 and the loss of $13,628 and the car is not being used anymore and everything happened in 2007. On the other hand, I am confused as I have not had this issue before. Any help would be appreciated.
