10 Best Charity Car Donation
Tax Deduction Tips
10 Best Charity Car Donation
Tax Deduction Tips
These are some of the most important
and best charity car donation tips you'll need to consider
before donating your car, truck, van or other any other
vehicle. You
can donate cars, trucks, boats, airplanes, ATV's, even old
motor homes and many other types of vehicles and get a good
tax deduction.
1. First it's important to know that
the laws were changed in 2004 limiting the donor's used car
donation tax deduction to the amount the selected charity
ends up selling the car for.
2. You want to find out if the charity is rightly
eligible to be the receiver of tax deductible contributions
so make sure that you ask for the organization's Internal
Revenue Service's "Letter of Determination." This will verify their
status.
3. Make sure to get a good
well-documented receipt from the charitable organization for
your vehicle or car donation.
4. In order not to send up any red
flags on your income tax return know that the IRS looks
carefully at non-cash donations so make sure to clearly
document the correct car or vehicle value and keep accurate
detailed records.
5. If your used vehicle is worth $500
or even more, then complete the newest Internal Revenue
Service tax deduction form, the number may change form time
to time, fill out the proper portion and attach it to your
income tax return. You must also include a written
acknowledgement from the charity.
If your charitable organization sells
your donated car, then they must provide you with the sales
price within 30 days with a certification the automobile,
truck, van or other vehicle was sold at between parties not
related to each other. The donor's tax deductions
must be limited to the total the charity sold the car or
vehicle for. If they don't sell the car, they must provide
you, the donor, with a receipt within approximately thirty
days of the sale, whenever that occurs. They must also
certify to the donor how it intends to use or upgrade/repair
the car and state in writing that they will not sell the
vehicle or transfer it to any other party.
6. If your car is valued at $5,000 or
more you'll need to get an independent appraisal and
complete the appropriate part of the Internal Revenue
Service form.
7. For cars or vehicles that are worth
under $5,000, use either Kelley Blue Book or a guide from
NADA to determine the current market value. Use the right
and correct figure for the date, mileage, and car's
condition. Don't just pick the highest figure for your
vehicle year and model and not note other important factors.
The IRS will look down on this.
8. Take several close-up pictures of
the vehicle inside and out.
9. Save all your receipts for
any upgrades including any new tires to document and verify
the car or vehicle's value.
10. It's important to know that it's
not the charity or charitable organization, who is obligated
to come up with the correct value and you'll have to pay any
penalties if the IRS audits or challenges you and finds your
figures are unfounded.
Finally be aware that some charities
use a donated car or vehicle for transportation or for
hauling and they benefit directly from the donation. But in
most cases the vehicles or cars are sold by the charity,
dealer or car donation center to help raise funds for the
charitable organization. When this happens, if it's the
dealer, the charity may get only a flat fee and may be as
little as $50 for your used car. So check with the charity
on how they intend to handle the donation if this is
important to you.
These are some of the best charity car
donation tips you can put to use immediately if you're
considering donating a car, truck or other vehicle to a
charitable car donation program.
copyright©2008 Helen Hecker all rights
reserved. No permission is given to copy or reproduce this
article in any way or in any form.
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