In the United States it's possible to donate a vehicle (usually a car, but it can be a boat or any other form of transportation) to certain charities, and in return be able to claim a tax deduction on your personal income tax return. A car donation may be accepted on the condition that the vehicle doesn't have to run but should be in towing condition. A charitable car donation may be worth more than a trade-in.
The new rules allow the donor to deduct only the amount the charity receives for the vehicle. Charities usually provide you with a release of liability when they take your vehicle, and after the car sells, they send you a tax-deduction form that explains how much they received for your car. There have been car donors who needed a new vehicle and they ended up buying donated and repaired vehicles.
You may have an old vehicle sitting on your property or on the street that you don't use very often. Make sure you have the title in hand if you call in your donation.
You can usually donate a sad-looking car that's not running, depending on the charity. The donor benefits from the donation by receiving a tax receipt for the highest possible value of the vehicle. It's good to know that when you donate a car, you'll get it off your property within just a couple of days, freeing up space in the garage, in the driveway or even your yard.
Your vehicle has to have all four of the tires inflated in order to be accepted. By donating a car it can eliminate spending money on repairs, advertising fees and the problems or liabilities associated with selling a vehicle. In some cases charitable car donors can still claim fair market value for their used vehicle.
If your automobile, truck, boat, motorcycle, RV or aircraft is no longer of use to you, it can still go a long way toward supporting the charity of your choice. Make sure to fill out the forms the charity representative gives you and have them ready for the driver when he comes to pick up the car. No need to pay for advertising, no loss of privacy and possible security risk, and no need to pay for vehicle registration, insurance, and repairs to keep your car in running condition while you wait for a buyer.
Also, if your car is running, consider dropping it off with the charity yourself to save the organization from paying for towing costs. For states that require smog certificates or safety inspection certificates, you can donate your vehicle without these documents. And some cars may not qualify for the tax exemption because of the condition they're in.
There are a few exceptions in the new tax law regarding the fair market value section, for example, you may base your deduction on the vehicle's fair market value if the charity sells it to a needy individual at a discounted price or if the charity uses the car as part of its mission instead of selling it. Some charities have the capability to repair or perform maintenance and get a donated vehicle ready for sale. A vehicle donation is allowed if you itemize your income tax return.
Whether it's the law in your state or not it's a good idea to protect yourself by having proper insurance coverage on your vehicle until it's donated. One of the exceptions to the new IRS regulations allows donors to still deduct the fair market value of their vehicle, provided the charity materially improves the vehicle.
If you donate a car you can get a tax break and help your community at the same time. Major charity car donation programs include: Kidney Foundation Car Donation Program, Target and Goodwill Industries. Whatever the case, your car donation, like any charitable donation, will get you a good tax deduction, will go to help someone in need and it'll make you feel good that you were able to help in some way.
No comments:
Post a Comment