Donate Cars For Humanitarian And Tax Credit Value
Donate a car to qualifying charities and make your payback to society plus get a qualifying tax deduction to lower your tax bill.
Used Car Donation Rules And Tips
It's one thing to donate your car. It's another thing to do it correctly, so that both the charity benefits and you receive an IRS tax credit approval rather than creating a 'can of worms'. Here's the key rules and tips for charity car donation.
* Assessing Your Vehicle's 'Fair Market Value'. Don't be confused by simplistic 'guarantees' from sales persons that you can automatically claim.. and receive... a dollar-for-dollar tax credit for $500 or more on your used car donation. The IRS is very fussy about your compliance to federal rules for gifting used vehicles. For one, the IRS points out in Publication 526 that you can only file your deduction for the "fair market value" of your car, truck, RV motor home or boat. By this guideline, the IRS is Not suggesting that you use the Kelly Blue Book "best condition" figure as fair market value, rather that you take the lowest figure into mind.
* What Vehicles Qualify? Virtually any working or non-operable car, SUV, truck, RV motor home or boat can be consisdered for a charity car donation.
* Title And Ownership. In order to receive, and tow away your vehicle, the quallifying charity must receive current valid title covering your vehicle in order to convey ownership legally under the charity car donation rules. You'll be asked to complete forms attesting to your ownership, attesting the current fair market value, plus sign a receipt reflecting the transfer of title to the charity.
* Trust... But Verify The Charity Group. Phone calls, nice people, paper work forms, plus the thought of 'clearing up your garage' by removing that old vehicle should not compromise your awareness of legal rules regarding used car donation. The charity must directly evidence to you that it is a registered not-for-profit 501(c)(3) organization, according to the Federal rules. Any hesitation by representative personnel means... walk away, "don't dontate my car" to these folks.
* How Do You Know If You Qualify To Donate Your Car By IRS Rules? Unless you take "itemized deductions" on your personal tax return, you may not qualify for a tax credit under the car donation rules. You can further research this key qualifying point by Google-researching IRS American Jobs Creation Act of 2004.
* You'll Need Detailed Receipts And Records. Making a charity car donation is no simple matter. The IRS requires detailed records of your ownership and use of your car or truck or boat. You'll also need an authentic receipt from the qualifying 501(c)(3) charitable group, which the IRS will verify before your deduction is allowed.
* What If The Charity Sells Your Vehicle? When you make a used car donation, you're mixing the financial interests of a number parties... including you, the charity, and the IRS. So, make sure that you cover the details correctly. The charity must provide you with an authentic receipt on the day that your vehicle is towed, or within 30 days thereafter. The "value" of your car donation may initially be for the amount of "up to $500"... or in the event that the charity sells your vehicle... the charity must then send to you a value-for-sale-receipt for the actual amount the vewhicle was sold. You take that amount and file it on your year end tax return. The IRS may allow the deduction, or may take the lower value of (a). fair market value versus (b). re-sale amount.