Donate a Car to Benefit Charities and Yourself
by Jeff Lakie
The Internal Revenue Service allows for many different types of charitable deductions
including cash, clothes, goods, and some services. One of the 'goods' approved by the IRS that taxpayers may donate
is their car. Although the IRS has tightened things up over the past few years, donating a car can benefit a
favored charity and help yourself come tax day. Lets take a look at how your car donation can help you and a
recognized charity.
Your six year old Buick LeSabre Custom has stood the test of time, but you have decided to buy a 2007 Buick La
Crosse Limited to give yourself a car that is new, up to date, and thoroughly reliable. Your LeSabre saw you
through long commutes to work, vacations at the shore, and it was the same car your daughter used to learn how to
drive. With 140,000 miles on the odometer you know that the trade in value isnt going to be that great, so you
consider donating the Buick to a charity such as the kidney foundation or to the association of the blind.
The IRS will reward your generosity if you follow certain ground rules:
--The charity must be recognized by the IRS and have 501(c) 3 status.
--You can only deduct the sale price of the car, not what you think someone might pay for it. Indeed, even
though the Buick could possibly fetch more than $5000 if sold privately, you have to list the 'gross proceeds' of
the resale of the vehicle by the charity. So, if the charity sells your LeSabre for $3700, which is the amount you
are allowed to deduct on your income taxes. Your charity of choice will provide written proof of the sale amount to
you for your records once the sale has been made.
Just remember if you get to deduct $3700 that doesnt mean your taxes will drop by that amount. Depending on your
tax bracket and what you owe the Internal Revenue Service and other deductions, you probably will save yourself a
few hundred dollars per year. Of course, your motive for giving should be based in part on helping a charity not
just receiving a decent deduction.
So, although the IRS has tightened up the rules concerning donating a car it can still be an important fund
raising tool for charities while allowing you to receive a tax deduction and the joy of helping someone out in
their time of need.
|
Jeff is the owner of Uk Lenders one of the Uks leading
secured loan quote providers. If you are searching for that low rate on a secured loan then visit our
site today for a free no obligation quote.
|
|