You can give your car to charity and deduct the gross proceeds
from the sale if the proceeds are for more than $500.
If the claimed value of the donated motor vehicle, boat or plane
exceeds $500 and the item is sold by the charitable
organization, the taxpayer's claimed value is limited to the
gross proceeds from the sale.
The charitable organization must notify the donor within 30 days
of the sale of the amount of the gross proceeds. However, if the
charity adds improvements to the vehicle, the charity must
notify the donor within 30 days of the contribution. If the
charity betters the vehicle then the donor may deduct the
vehicle's market value.
Actually, it is much better if the Taxpayer can deduct the
vehicle's market value, because there normally is quite a gap
between perceived market value and actual proceeds, and this
difference can literally be thousands of dollars.
One car donation center states that it has processed over
500,000 car donations since 1992, which adds up to about 30,000
cars a year.
Did you know that you can also donate boats and RV's? So if aunt
Dora dies, and leaves her jalopy in the driveway then maybe this
is an attractive way to get rid of the car especially since it
does not start anyway.
But wait! It is not that easy. Where is the Title to the car?
Not in the glove compartment? You may have a problem. You may
also have a problem if the title is joint, say Aunt Dora and
Uncle Nick. If Aunt Dora died and UncleNick is still alive there
will be all kinds of problems.
How about vehicle emission controls, was the car equipped with
them, were they disabled?
When you make a charity car donation: You get free vehicle
pick-up whether your car to donate is running or not. In some
cases the company will actually put a new battery in the car to
get it running again. You avoid confusing Department of Motor
Vehicles paperwork or Smog hassles.
How it works: Call a reliable Vehicle Donation company. They'll
take your information over the telephone, they'll handle all the
DMV documents, they'll pick up your vehicle , arrange an auction
sale and distribute the proceeds to the charity.
If your donated vehicle/vessel sells for under $500 the receipt
you receive at the time the vehicle is picked up is all you need
for filing your taxes.
The actual net proceeds of a donated car seem to range around
the $400 figure In all cases, a charity car donation is sold to
the highest bidder by a well-established charity vehicle
auction.
You must have a certificate of title.
Some companies will also guarantee that if your donated car gets
a ticket after your donation date, they'll take care of the
ticket for you and they zealously will fight it so you don't
have to worry about it.
The reason cars are sold by public auction is that people simply
will pay more at an auction for your car than they will pay at a
dealer.
Also, if the car is running at the time of the auction people
will pay more so it is advisable to get it to running condition
when reselling it.
About the author:
Car Donations, good or bad? by J Schipper Tax Attorneys by J
Schipper
