Another budget question.

I bought a stand alone harness for $115

Its actual fair market value is $550.

My buddy and I bought a lot of parts containing a megasquirt an intake, fuel rails, TB and injectors.

I gave $275 for the computer and he gave $500 for the intake parts

I swapped the MS for my stand alone harness but later on a different friend offered me a deal I could not pass up, the MS  for a trans adapter, a stand alone harness, a tuned computer and a few other related parts.

In this scenario would the budget hit be determined by what I originally paid for the original harness? 

Or by what I actually paid for the MS?

Or by prorating the parts lot that the MS came with?

This would be my second self trade on the project if that mattered.

Both the original stand alone harness and the MS computer were new or unused but years old and had similar retail value new ($850 for the stand alone, $920 for the MS)

Sorry. I tend to be a little dense when it comes to challenge math.

To me it seems like it should only be a $115 budget hit.... But then I end up with a big windfall and I want to make sure im doing it "right"

You may need to rewrite your wall of text.

I'm seeing 115 for a harness and 275 for the computer (which I assume is the mega squirt) as the amounts that you initially paid. If that's what you paid and you have documentation fair market value doesn't matter at all. If you trade the harness and the mega squirt for other parts, The budget hit would be 390, The combined cost of what you paid for the harness and mega squirt. 

You mentioned your buddy and you bought a lot of parts you didn't mention what the total cost for the allotment was. That matters. It sounds like 775 was the total cost of the allotment with you putting in 275 for the MS and him getting the rest of the allotment. 

FMV has no bearing when you know the amount that is actually paid on the parts. 

And if you're talking about potentially purchasing an ECU for $275 and then selling it or not utilizing it and claiming fair market value was recoup, that's not how it works. As nothing involved with the transaction would be going on the car if you hypothetically sold the ECU, and thus it wouldn't be part of the build. Secondly, again hypothetically, say you purchased an ECU and harness together single transaction for $400 and you utilize the harness but not the ECU and sold the ECU for $600. The recoup would be $400 and you would be able to use the harness, recoup cannot exceed cost paid on an allotment of parts. 

As you stated.

"I swapped the MS for my stand alone harness but later on a different friend offered me a deal I could not pass up, the MS  for a trans adapter, a stand alone harness, a tuned computer and a few other related parts"

Maybe I'm off here, but I believe the rules cover this question.  The "offer from another friend" = what sounds like an inside deal and would then need to be budgeted at market value.

I'm not trying to be a D!@< here, just giving a response to the scenario given.

I have specifically avoided purchasing parts from friends to avoid any budgeting issues and questions.  Many junkyards, Craigslist, Facebook Marketplace, Ebay and Amazon covered most of last years build.

Also, I'm guessing that you have documentation for each of these purchases and trades?

In reply to Catch22 :

I am VERY active in the 3800 facebook comunity.

I have many "friends" on facebook. Tyler lives a couple hundred miles away, i bought parts from him once in the past, we have only met the once but we have things in common.

He posted publicly that it was for sale and when I asked what he wanted, he made an offer. I took it.

At that point I was still planning to use the MS and that deal is fair and reasonable to my mind. 

Was not even worried about it .

Until now

In reply to captdownshift (Forum Supporter) :

I traded myself the harness I paid $115 for, that has a FMV of $550 for the megasquirt.

They have a similar FMV (IMHO) as they both cost around $900 new but had never been use and i leteraly was going to use the one in place of the other i felt that was a justifiable trade.

What I paid for the MS would not be at issue under the rules as I inderstand them. i have no proof of how much I paid for it individualy.

Alternately my understanding is that if the self trade were ruled a foul... Id have the option of Prorating the parts lot that contained the megasquitrt by their retail price:

Stealth ram 462, fuel rails 295, injectors 350 throttlebody 120 megasquirt 775 and harnesses 150 for a retail value of 2100 ish making the value of the mega squirt about 40% ish giving the megasquirt a value of about $310

I then traded the megasquirt that was in unused condition for a modified stock harness with computer, a transmision adapter a shifter and some pullies. All in used condition.

My understanding is that the new parts lot ends up in the budget with a $115 hit.. Unless it is ruled that im abusing self trade and then its a $310 hit.

I hope that was more clear.

I'll wait for judges ruling, as it's not my place.

But I'm going to say you can't horse trade with yourself plugging in fair market value for something that you paid roughly 20% of the value of for. How do you traded that harness to someone else for something that's worth $500, then sure, but even then trading a part that isn't going on the vehicle for something that is, really makes what's going on the vehicle Fair market value. Regardless of how much you paid for the part that you traded it for.  

If I go to the junkyard and pull off some AMG monoblock wheels and I pay $200 for the set because it's $50 each per alloy wheel. And I trade those AMG wheels for an LS motor, because those wheels are worth two grand. That a LS motor isn't $200 on my challenge budget, it's fair market value. What the wheels cost me have nothing to do with it because the wheels aren't on the build. 

I'm having trouble seeing the chain of relevancy just like the Capt.

I don't fully understand what you're trying to do and how you're trying to do it, which usually means the rules aren't being followed.

Don't forget: "You may not list fair market value instead of purchase price on your budget unless you do not have a receipt from the purchase, or depreciation/appreciation has drastically affected the car or part’s value. "

In reply to Tom Suddard :

I should have asked quesrions seperately.

"You may sell or trade parts to yourself for fair market value"

I had engine management on my car and in my budget. Ive had it for about two years. 

It was actually put in the car twice and connected to the engine twice (all of the grounds and wire conectors) but it was never wired to the ignition battery or fuel.

I traded it to myself for another engine management solution in similar condition with similar retail value.

I have a recepit for the first system. I do not have one for the second.

Is that within bounds for a self trade?

In reply to Crazier :

That instance would immediately raise the question of why you're changing engine management systems. 

And if the EMS that you're disgarding was originally on the vehicle at the time of purchase or if it was purchased as part of a lot with other parts where you purchased the parts lot as a whole. 

Sweetheart deals with yourself or going to raise red flags faster than sweetheart deals with friends. Your buddy who's part of a group or community, who lives far enough away that he would rather ship stuff, giving you a sweetheart deal on something that he posted publicly for sale on the internet is just having an advantage in negotiation. If Stampie were to list something for sale that happens to fit on a BG chassis car and I'm the first to express interest and he inquires if it's going on my challenge car (he'd likely charge me double) but if he knocks 20% off of the price listed instead, that's fair game. 

However if I go to the junkyard and find a car with a demon 650 on it but the jets are too small for my application, and I have another demon 650 sitting on the shelf in my garage that I bought from summit and it has the properly sized jets. under no circumstances can I trade those carbs for one another even though they're the same carb. I can swap the jets from the one of the other over and the cost would be the cost of what the new jets are, plus the junkyard cost for the carb. 

In reply to captdownshift (Forum Supporter) :

I could use a Demon 650 if you wanna give me a deal. I'd prefer that you prejet it for my 351w build.

I think what I am understanding...

The stand alone harness is meaningless.  It's not on the car, and didn't come with it.  It's a distraction.

You purchased an MS for $275, then traded it for a trans adapter, a stand alone harness, a tuned computer and a few other related parts.

Budget hit $275.

In reply to SVreX (Forum Supporter) :

Ok. I can get on board with that. But I am totally confused with how a self trade would work or what its value is?

But I have no recepit for the MS individualy.

So by my understanding is i have to add up the total retail value of the parts we purchased as a lot.

Get the percentage of the retail value of the parts that are going on the car and then use that percent of the purchase price of the parts lot for the budget.

Making the budhet hit a bit over $300.

But i would still like a run down of how a self trade would be effectivly used.

SVreX (Forum Supporter) said:

I think what I am understanding...

The stand alone harness is meaningless.  It's not on the car, and didn't come with it.  It's a distraction.

You purchased an MS for $275, then traded it for a trans adapter, a stand alone harness, a tuned computer and a few other related parts.

Budget hit $275.

Example??: Buy a wheel for $50. FMV of that wheel is $500. Self-trade the one wheel ($50 receipt) for four wheels of $500 FMV. $50 budget hit. You need to document FMV of the one wheel and FMV of the four wheels.

That's pretty much the way I see the OP working it..?

In reply to AAZCD (Forum Supporter) :

Nope.  

Buy a wheel for $50, it's value is $50.  You don't get to self-trade to make it worth more.

Crazier said:

In reply to SVreX (Forum Supporter) :

So by my understanding is i have to add up the total retail value of the parts we purchased as a lot.

 

Not according to your original post:

Crazier said:

I gave $275 for the computer and he gave $500 for the intake parts

You didn't say anything about buying a lot.  You said you bought the computer for $275.  Your buddy bought something else.

That's not related to the car is it?  Don't make it more complicated.

SVreX (Forum Supporter) said:

In reply to AAZCD (Forum Supporter) :

Nope.  

Buy a wheel for $50, it's value is $50.  You don't get to self-trade to make it worth more.

Right, but that's pretty much what I understood his original post to be attempting.

In reply to AAZCD (Forum Supporter) :

Right.  But he can't do that.

We agree.

In reply to AAZCD (Forum Supporter) :

But your example didn't work either.

FMV doesn't have anything to do with your example.  If you buy a wheel for $50, it's value is $50.  No FMV.

I think you are both making a mistake with FMV...

You are trying to take an item you got a really good deal on, upgrade its value by using FMV, then trade the item (at the upgraded value) for a more expensive item.

That's not what FMV is for.

In reply to SVreX (Forum Supporter) :

"My buddy and I bought a lot of parts containing a megasquirt an intake, fuel rails, TB and injectors.

I gave $275 for the computer and he gave $500 for the intake parts"

I wish it was simple. But it is not.

I have dicumentation for the parts lot at $775 shipped.

Every Challenge car that has ever come to the event has parts of it that were simply a good deal.  That's part of the event.  They don't get revalued through FMV.

In reply to Crazier :

Your problem is not documentation.  It's verbiage.

You said YOU bought the MS for $275. 

If you'd rather consider it as an entire lot, go for it.  But you could have simply gotten 2 receipts, and been done.

Damn it, I just want a cheap carburetor.  Why y'all making it so complicated?

For the record a carburetor is a standalone harness plus a fuel suction device all in one simple little package.