@brianmb62-gmail- wrote:
Makes sense. Could the company value the assets at $0 as they would be willing to leave them or trash them? What other process would they use to value the assets?
The IRS has an entire publication on this, although it is in the context of valuing charitable donations the principles will be the same.
https://www.irs.gov/publications/p561#en_US_201911_publink1000257933
Fair market value.
Fair market value (FMV) is the price that property would sell for on the open market. It is the price that would be agreed on between a willing buyer and a willing seller, with neither being required to act, and both having reasonable knowledge of the relevant facts.
I suppose there is still some leeway, since you could determine FMV as "what if I listed the items on Craigslist", or "what if I sold the items to a company that specifically buys and resells used office items". If you assign a FMV of $0 based on "what if I offered the items at a garage sale at midnight and forgot to advertise", I think the IRS would probably object if they audited your company or your employees.
If your employees want the items, then presumably they have some actual value. Don't play games.
And, since the value of the items would be considered taxable income, remember that it will also be subject to social security and medicare taxes to both the company and the employee.
