Where To Donate Women's Used Cars For Charity Abilities United - Because some
taxpayers got greedy, claiming much more than their old autos were
worth, lawmakers tightened the rules on how much you can write off for a
vehicle donation. Now the precise tax break depends on the donor's
claimed value of the gift and how the charity uses the vehicle.
This value amount
applies to autos, boats and even airplanes. When the donated vehicle's
value (based on credible fair market value analyses) exceeds that
amount, claiming the deduction gets more complicated.
This valuation
ceiling comes into play when a charity sells a donated vehicle. For
example, you donate your old station wagon that's worth $1,000. The
charity must give you substantiation of the Internal Revenue
Service-allowed donation amount within 30 days of when you turn your car
over to the charity or, if the group sells the auto, within 30 days of
the vehicle's sale.
Previously, such documentation was generally only kept by the taxpayer in case the IRS questioned a claimed deduction.
In the case of a dealer, the charity generally receives a flat fee per car, sometimes as little as $45 per car.
Listed below are tips
for donors who would like to donate a car to charity. Legislation in
2004 limits the donor's tax deductions for car donations to the price at
which the charity sold the car.
See Car Donations: Taking Taxpayers for a Ride for more.
Be sure that you get a receipt from the charity for your car donation.
If the car is worth
more than $500, the donor must complete Section A of IRS Form 8283 and
attach it to their tax return. If the charity sells the car, the charity
must provide the donor with a certification that the car was sold at
"arms length" between unrelated parties and the sale price of the car
within 30 days. In this case, the donor's tax deductions will be limited
to the total amount the charity sold the car for. If the charity does
not sell the car, it must provide the donor with a receipt within 30
days of the sale. Penalties are imposed on charities that provide
fraudulent acknowledgements to donors.
Remember, it is the
donor, not the charity, who is obligated to value the car and who will
pay the penalties if an IRS challenge finds your figure inaccurate.