How To Donate A Car

How To Donate A Car Biography

Source (google.com.pk)

That is not how it works. The amount you can deduct depends upon several factors including how much your vehicle sells for.

For more information on this visit this page: Car Donation Misleading Claims

Summary of Car Donation New Tax Law of 2005

Thanks to the new tax law, the IRS has taken the guesswork out of how to determine the value of your vehicle.

Beginning January 1, 2005 you may deduct the full price the charity receives for the sale of your vehicle. This greatly simplifies the process for you in several ways.

Under the new law, if your vehicle sells for more than $500 then the following applies:

If your vehicle sells for more than $500 you'll know exactly the amount you may deduct, eliminating guesswork. Thus you no longer have to research and come up with an estimate of the fair market value of the vehicle.

The selling price of your vehicle becomes its fair market value and is what you can deduct on your tax return in most cases.

This also eliminates the risk of you getting into trouble by overstating the value of your deduction on your tax return.

This saves you both time and risk.

If you car sells for $500 or less at auction, you may deduct what you determine as the fair market value of your vehicle or the amount the vehicle sold for, whichever is less, and as long as that figure is under $500.00.

QUESTION #2:

Can Some Charities Offer Full Fair Market Value?

How come some other charities are offering "full fair market value" and you don't?

Actually, if this statement is made by a charity it is not in accordance with the IRS tax law. The way you deduct for a car donation is dependant on many things, one being the sale price of the vehicle.

Also the statement "Full" Fair Market Value is misleading as it infers that some charities might offer "Full" Fair Market Value while others offer less than full.

For more information on this visit this page: Car Donation Misleading Claims

QUESTION #3:

Can I Receive a

Tax Receipt AND Vacation Voucher?

Can you provide me with a tax receipt and a vacation package?

Actually we do not do that. And a donor should know the IRS regulations concerning this.

Supposing a charity provides a commodity, for example a vacation package in exchange for a car or vehicle donation.

The tax receipt must state that the charity provided that commodity (the free vacation) and the fair market value of that commodity must be subtracted from the value of the car donation. In other words your tax deduction will be less.

For example, if your vehicle sells for $1000.00 at auction and your vacation package that you receive has a fair market value of $400.00 you can only deduct $600.00. $1000.00 for the donated car less $400.00 for the vacation package.

We certainly do not want donors to be shocked be receiving a tax letter that states they have to subtract the fair market value of the vacation from the value of their vehicle.

We are the first charity ever to provide a vacation or other offer, but we did so to assist those individuals that cannot benefit from a tax deduction or would rather have a nice vacation. (You can read our Tax Deduction Overview if you have questions about getting a tax write-off).

Thus to be fair to donors and to be ethical within the regulations of the Internal Revenue Service we have two different programs. These programs are totally separate. The charity donation program and the vehicle recycle program.

Donor Beware

We have given warnings before and we give it again here. As a matter of fact. In one of the revisions of IRS Form 4303, "A Donor's Guide To Vehicle Donations" the IRS pointed out similar warnings to what we published on our web site several years ago.

We also urge you to read the fine print on any web site that is making statements about car donation benefits that other charities are not making.

QUESTION #4:

Tax Deduction Information

Tax Deduction Information About Tax Write-Offer

We provide here an overview of our the IRS tax system and how it applies to charitable vehicle donations. This is not professional advise but some general information for those that might not be familiar with the tax system.

IRS Publications that concern vehicle donations and how much one can deduct

IRS Publication 526

(An excerpt regarding non cash charitable contributions. Revised December 2005)

IRS Publication 561

(An excerpt regarding fair market value. Revised October 2005)

IRS Publication 4303

(An excerpt regarding new tax law information. Revised February 2006)

END OF YEAR QUESTIONS ABOUT CAR DONATION TAX DEDUCTIONS

QUESTION:

Will my donation be good for the year that I sent in the donation form, even if I don’t receive the receipt until the beginning of the New Year?

ANSWER: YES!

IRS Publication 4303, “A Donor’s Guide To Vehicle Donations” states:

“… the written acknowledgment must contain … the date of the contribution…”

The date of contribution is the date that we received the donation form. So it can even be on the 31st of December and will still be for that tax year.

The only exception might arise if you cancel the donation and then resubmit it later, or if the donation is canceled by us or the towing/auction facility due to reasons of inability to make pick up arrangements or lack of proper vehicle documentation, etc. Generally if you work with the towing/auction facility and assist in any problems that might arise then your donation will still be considered effective the date you filled out the donation form.

QUESTION:

If I submit the donation form on the last few days of the year and the towing/auction facility does not pick up the vehicle until the beginning of the New Year does the donation still count towards the current year, i.e. the year I submitted the donation form online?

ANSWER: YES!, as stated above.