Where To Donate A Car

Where To Donate A Car Biography

Source (google.com.pk)

When it comes to getting rid of your old jalopy, do you know your choices? Many people trade in their cars for peanuts or attempt to sell their vehicles themselves through windshield signs, lemon lots, or classified advertisements. What you may not realize is that your can get a great deal more out of your hunk of junk by donating your car rather than selling it.
Why donate a car? Well, why not! When you donate your car, you provide a means of transportation to individuals who were previously without, allowing them to hold jobs they couldn't before due to the lack of transportation. Also, many agencies accept the donation of your car, then overhaul the vehicle and sell it to a third party, thus earning money for the charitable organization.
There are a variety of organizations that accept donations of cars, trucks, recreational vehicles, boats, and trailers. These organizations include the American Diabetes Association, Kars4Kids, Firefighters Burn Institute, American Red Cross, Habitat for Humanity, and the United Way. Donating your car is a great way to help these charitable organizations achieve their goals of providing assistance and care to individuals of all walks of life.
If your car is just a hunk of junk rusting in your front lawn, do not rule out donation! Instead of dropping your broke down car off at the junk yard, contact a charitable organization that accepts car donations. For the more part, organizations will accept vehicles that no longer run assuming the value can offset the towing fees. Yes, the organization will even haul away your car for free!
The main question many individuals have regarding car donations is simply: why donate when you can sell? Although many individuals would like to donate their time, money, or goods, many individuals need the funds from selling a car to purchase a new vehicle. The main reason why individuals choose to donate their car or recreational vehicle is because the donation is tax deductible. If your vehicle is worth under $500, then the deduction can be taken immediately. However, if your car is worth over $500, the charity will send you a specific value for deduction. This value is usually the sell price of your vehicle.
This tax deduction is perfect for individuals whose vehicles are worth less than $1,000, since generally they will be hard pressed to either trade in or sell their car for that value. Instead of receiving a pitiful amount for your old vehicle, consider the impact a tax deduction can make at the end of the day. Use your tax refund towards the purchase of a new car instead of trading in your car for a fraction of its potential price.
Donating recreational vehicles, including boats, campers, and trailers are another great way to give back to the community while reaping the benefits on your taxes. Often, the market for these vehicles is limited and individuals are often stuck paying storage costs or other fees while they are searching for a buyer. Instead of watching your investment diminish, contact a charity that will accept the donation and immediately see your gesture benefit both parties. Many charitable organization that accept cars may not necessarily accept these vehicles, so be sure to contact any organization before you show up with your boat, camper, or trailer.
Donating your vehicle is an excellent way to give much needed support to charitable organizations while also benefiting your tax return. If you find yourself in possession of a vehicle that is no longer working for you, consider donation before you take out that classified advertisement and let an organization haul your car away for freeI
Sell Your Used Car AND Receive a Tax Deduction!!
This is a special circumstance that can be extremely beneficial if you want to donate something of significant value (like over $1,000) but because it is complex, and not widely used, I have to almost insist that you consult your CPA or tax preparer to make sure you are meeting the letter of the law.
Of course, you can also always call the IRS directly toll-free at 877-829-5500. That number will put you in touch with an IRS agent who knows how to identify charities that can accept cars for tax deductions, but they’re a good start to clarify any questions about bargain sales and partial cash payments.
Now that the disclaimer is out of the way, here’s the scoop: your donation can be classified as “partly a sale” and “partly a donation”, and certain donation processors and charities, like All Bay Vehicle Donations, can assist you with both the sale and the donation part. In other words, you can get a bit of money AND a tax deduction when you donate a car, a boat, or any other valuable item.
The important point here is that not all charities or donation processors will offer you any money for your donation, and if you want this setup, you’ll have to find one that does offer some money. The charity benefits because they get a donation that worth quite a bit more than the average $300 car sold at auction, and you benefit because you get both the deduction and whatever the charity will offer you.
The “partial cash payment” is the amount the charity offers you for donating the item. Your deduction (the other part of the money involved here) is the difference between the value of the item and what the charity actually gets for the item when they sell it (this is also called the gross selling price). The value of the item is the “fair market value”, which is typically the Kelly Blue Book price for a car, or whatever a similar car has sold for in your area recently (check the classified). However, if the value of your item is more than $5000, then you’ll need to get an independent appraisal from an appraiser that the IRS recognizes, and you’ll need to get that appraisal in written form (though you never send it to the IRS, you just keep it in case they decide to take an interest in your donation). The other snag with value is that the car or item has to be worth at least $500, but you probably would not be going through all this hassle in the first place if your donation was worth less than $500.
IRS Bargain Sales are defined on page http://www.irs.gov/publications/p544/ch01.html of the IRS web site as “Bargain sales to charity. A bargain sale of property to a charitable organization is partly a sale or exchange and partly a charitable contribution. If a charitable deduction for the contribution is allowable, you must allocate your adjusted basis in the property between the part sold and the part contributed based on the fair market value of each.”
Want an example? Lets say you donate/sell a car worth $20000 to a charitable organization. The charity gives you $4000 for the car, thus “buying” the car from you for $4000. Here’s how your “adjusted basis” for the car would be calculated. Note that per the IRS “You have a gain if the amount realized is more than your adjusted basis in the property. However, you do not have a loss if the amount realized is less than the adjusted basis of the property. ”
Sales price = $4000
Minus: Adjusted basis of part sold ($8,000 × ($4,000 ÷ $20,000)) = 1600
Gain on the sale = $4000 – 1600 = $2400
We do strongly suggest you consult a tax professional that can advise you on how such a transaction would impact your specific tax situation..