Inisghts On Car Donation For Tax Reduction
submitted: Jul 28th 2008 |
by: RayLam |
Total views: 1 |
Word Count: 392 |
| 
A good place to read the government rule on car donation is IRS Publication 4303, A Donor's Guide to Car Donations (available on the IRS's website at www.irs.gov). This guide outlines some important rules regarding car donation. For example, one important rule states that car donation must be made to qualified organizations in order to be tax deductible.
In 2005, the laws changed regarding tax deductions on boats, vehicles or airplanes that are valued over $500. Now, the charity must provide written documentation or acknowledgement within the 30 days of processing your donation. If the charity gives an exaggerated or false statement, they can be fined or penalized.
With the new law if your car sells for more than $500 at the auction where your car will be sold, the charity is obligated to send you a receipt that has your name and vehicle identification number or VIN of your car. They must also state that your donation was "arms length" which means that the person or organization you donated your car to is not related to you in any way whether it is your family or a business associate. They must also include the selling price of your car. This is the fair market value price. It is that simple. No more searching through records and books trying to find the right numbers to make your car donation tax deduction.
Even though the old laws had some problems, many charities are skeptical about the new car donation laws. A lot of organizations are concerned about what might happen when the responsibility of tax deduction is put under the authority of the charity rather than the donor. Some of them have actually sent a letter to the Treasury Secretary that suggests that people may be discouraged from donating cars if they aren?t aware of the deduction amount that will be allowed. This, they fear will mean that some donors will be lost. Charities feel that donors must be able to weigh the cost of benefit in order to know if it is enough for them.
When applying for the car to donate for tax deduction you must also file a Charitable Contribution Deduction. As well as this you must be immaculate in keeping records of all your receipts and forms. This will help you to achieve the most from the car to donate for tax reduction.
About the Author
Learn about charity car donation by visiting http://car-donation-advisor.info and get a FREE limited report on "Car Donation Programs" by visiting http://car-donation-advisor.info,a website that provides free advice on how to donate your car
Comments
No comments posted.
You do not have permission to comment. If you log in, you may be able to comment.
