Things To Watch For If Donating Your Car

It really really should be simple to give away your car to a charitable organization. Your basis for undertaking this will likely be the gains the charity gets and a easy way to dispose of the car. Except nothing is as simple as it seems. Even though you can receive a tax deduction for donating your car, there are quite a few requirements to meet.
When you donate your car to a altruistic organization they might not receive the full profit of that donation. Quite often the charity does not sell the cars itself but uses a trader to generate the sale. The automobiles are then sold at one time and the charity could only get a fee for every single auto sold. This fee could be only forty five dollars a vehicle. The car dealer takes the majority of the return. Your selected charity loses. 

Naturally one of the primary incentives for donating your car to charitable organisations will be the tax deduction it is possible to get. Up until recently the IRS allowed the tax deduction to be equal to the fair market value of thedonated car. As normally develops in such situations, the tax legislation was abused as folks valued the vehicles at a higher value than their real worth. So the IRS had to clamp down. The law now states that you can only deduct fair market price for the donated car if under five hundred dollars. The onus is still on the donor to confirm or to substantiate that value if asked. For donated cars valued over five hundred dollars the tax break is only equal to the price the charity received for it. A car donated to charity with a value of five thousand dollars or far more should be appraised by an independent party. 

This has, needless to say, impacted on the number of cars donated to charitable organizations. It is possible to, nevertheless still get rid of your car via a donation and get the tax benefit. There is just more documentation to acquire and maintain.
Yet another way to donate a car to charity is to look for a charity that will utilise the donated auto in its personal operations. Put simply, the charity will use the donated car to transport goods or for transportation. The charity must supply you with a letter of acknowledgement of thedonated car and its planned use. You decide the donated cars fair market price and claim that as a tax deduction. The other rules mentioned above in terms of appraisal and documentation still apply. 

There also are charities which usually do not sell donated cars but restore them and give them to the needy. These folks can then make use of the automobiles to grow to be self sufficient and stable. Once again you can deduct the full fair market value of the auto you donated. Naturally all of your paperwork should be in order. 

So you are able to nevertheless donate your car to a not for profit group and get your tax deduction. You have to do your homework and select the best organization for the car donation. It really is optimal to question your charity of choice on their needs and intentions. Make sure they have tax exempt status. If the charity makes use of a middleman, make sure that the charity will nonetheless benefit. Also remember to keep all your documentation. 

The best place to begin is an organization that accepts cars for donation. Look at http://www.donatecarusa.com and get the very best suggestions.

A guest post by emill