Car Donations To Charity

Get The Most Advantages From Your Car Donations To Charity

Many people have been donating vehicles that help their communities by providing cars, RVs, boats, motorcycles and other means of transportation to local charities. These donations help all parties involved, the person who wants to help their local communities, and the charitable organizations that are receiving the vehicles. There are quite a few reasons for making car donations to charity, including the undeniable tax benefits that can be given from the large deductions you may be able to take. Be careful however, the IRS has taken a dim view of some of the questionable valuations people make when appraising the value of their donations. Rather than needing to clamp down on everyone and pay for more enforcement and auditing, the IRS decided to alter the deduction rules as they pertain to vehicle donations.

The rule changes will not hurt you if you intended to donate a vehicle that you are going to value at less than $500, but otherwise there might be some changes you need to be aware of. All new deductions claimed that exceed $500 are subject to these new rule changes, but the regulations that the IRS has now created are not extremely difficult to comprehend. If you have donated a vehicle to a charity that qualifies then you are allowed to claim a deduction up to the exact dollar amount that the charity resells the vehicle for. What this means in a nutshell is that you are not now able to claim the blue book value for your car, as the IRS is more interested in what the vehicle is worth on the open market and not what its possible value would be in a perfect world.

Charitable organizations have been instructed all about these rule changes, so they should be able to handle and assist you with the changes without any trouble. If you want to donate a car to a charity you will need to arrange a means of delivery with the charity so it can attempt to resell the vehicle in the near future. As soon as the auction for the vehicle has been held and the vehicle has been sold, the charity will send you a memorandum that lets you know what the gross proceeds from the auction of the vehicle were. This memo will most likely be distributed to you on Tax Form 1098-C, but this is not really required. After you have this information, you can take the deduction from the gross proceeds on Schedule A and attach the Form 1098-C you have been given for your return. On the other hand, if the charity tells you about the sale through a written letter you should attach this letter to your tax return so that you can show documentation that you are in compliance with the new rule change.

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