I have a couple of questions regarding the charitable donation of a high priced item.
- Does the basis have to include what was paid for the item? For example, say you purchased an item two years ago for $200. Either, you got a great deal on it and it really was a $400 item (and held its value) or it increased in value and is now worth $400. How do you determine the value to deduct? Also, does depreciation play into this? What if you were given an item for free and then donate it?
- If you have both W2 and 1099 income, how do you determine where to take the deduction? Meaning, what if the item overlaps use or source between your "regular" deductions and your self-employment deductions against the 1099 income?