It sounds so simple: Donate your used car to charity , avoid the hassles associated with the sale and score a tax deduction at the same time. everyone wins, right?
Not necessarily. Hockey As the saying goes, the way he is double-stick is paved with good intentions, and is surprisingly easy to feel this act of good intentions.
Before you hand on every one of your largest assets, please read the following tips to ensure that the correct action.
You have the delivery. After identifying a worthy charity, will recognize that there is pay someone to take a car or boat for you. To maximize the benefits of your self-giving love, your car or the boat itself.
Knowing when you can use the market value to report. You do not need evidence of the sale price when love keeps the vehicle or vessel and uses in its work of charity, or if your donation is worth less than $ 500. You can then report their market value is based on lists of Kelley Blue Book and similar sources.
Transfer the vehicle with care. Want to eliminate all risks of implementing parking tickets and other injuries after saying goodbye to your donated vehicle? Then formally re-title the vehicle to charity, and report the transfer to the State Department of motor vehicles or licensing. You never leave empty space on the property documents for donation to charity.
Keep a detailed paper trail. If your donation is worth more than $ 500, you must attach IRS Form 8283 to your tax return. If it is worth more than $ 5,000, the documentation must include an external evaluation. You also need proof of donation, how to change a receipt from the charity and a copy of the license.
Want to know the status of the receiver. To qualify for a deduction, the charity receiving the donation must be an IRS-approved 501 (c) (3) organization. Your church, synagogue, mosque or temple likely qualifies. (First check to be sure.) You can also use the Internal Revenue Service website and search for Publication 78 visits to other qualifying non-profit organizations to find. (Enter 78 "" in the search box on the homepage and you will be directed to the IRS publication right).
Avoid intermediaries. Numerous non-profit intermediary organizations aggressively advertising on television, billboards and elsewhere to help, please donate your car to charity. Here's the catch: These organizations typically keep about 50-90 percent of the value of the vehicle, and the charities do not get what they could get. To avoid this, check directly with charities you admire and find out if they accept donations by car or boat.
Check the math. If you still feel compelled to an intermediary organization – possibly use, because you are committed – at least ask the organization how much car or boat-value is a charity. If the organization is simply charity tax plan – say, $ 100 for a used vehicle regardless of its value, or $ 2,000 per month – the donation can not claim a tax deduction.
Be detail-oriented. This paper trail may be difficult, but remember: this is one of the largest gifts ever to do. Taking the time to dot the i, you can guarantee that love will benefit the most, and get the biggest possible deduction.