Re: Insurance and donations

"David Axt" <daxtATpacifierDOTcom> writes:

How do you guys insure your instruments?

Personaly I don't. I view insurance as protection on items that a) I
can't afford to replace and b) I'd be quite screwed if I loss use of
them. For me, that involves the house and the car. If my $220 off
eBay gig bass goes missing, I'll buy another. If they swipe my $1500
rig, I'll have to cobble another rig together until I save up to
replace it. Beats the *** out of the price of commercial insurance
on this crap for the little money I make out of the pursuit.

Now, if you don't use your stuff professionally, depending on how your
homeowner's policy reads, your instruments up to a certain amount are
protected under your homeowner's or renter's insurance while they're
in your home.

I typically buy and sell a few items throughout the year so I wonder
if I have to do anything special record keeping-wise?

Receipts are extremely important if you need to make a claim,
regardless if your contents are insured for replacement cost or not.
Photos help give adjusters some comfort that they're dealing with an
actual loss. Having serial numbers on file makes recovery possible if
a miracle occurs and the police find your gear somehow.

Also, I am considering donating a bass amp to a church. How do I go
about writing that off my taxes?

The way I personally do this (which may or may not have any
applicability to your own situation), as I treat music as a side
business, and pursue it as such (record keeping is very important to
this) is as part of my schedule C for musical endeavors (a sole
proprietorship), where my music income (generally as a 1099 contractor
to my band) is reported, where I deduct all music related purchases
(either taken fully in the year purchased as a section 179 expense, or
scheduled in depreciation depending on how the income outlook looks
for the business in coming years) as well as auto mileage throughout
the year to rehearsals and gigs, and any charitable donations of
equipment I'd include in schedule C.

Now, I haven't read it myself but a very well educated colleague was
impressed at the quality of Small Business For Dummies, which actually
covers a lot of this stuff if it's all new to ya.

Now, for me, if music were not something that passed the business
endeavor tests, but was hobby income instead, I would record the fair
market value of the donated amp on my 1040 Schedule A line 17 instead,
assuming I was itemizing deductions, as a I regularly do. If I was
back in the days before I had enough deductions to make that
worthwhile, and was just taking the standard deduction, and if I
weren't filing schedule C's for music business, I wouldn't have
anywhere to deduct such a charitable gift.

This is what I'd personally do for myself. THIS IS NOT TAX ADVICE FOR
YOUR SITUATION. Consult a tax advisor for advice that's germane to
your situation.

:-)


Best Regarsd,
--
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