DerbyDad03 wrote:
On 10 Sep, 11:25, (Doug Miller) wrote:
In article om, nico wrote:
Good to know!! Read it............. If you are considering donating a
used car to a charity there are several things you need to know. Your
donation benefits not only you
Baloney.
Donate a car worth, say, $1000, for a $1000 deduction from my taxable income,
and get maybe $300 off my taxes.
Or sell the car, and get $1000.
How, exactly, am I better off by donating it?
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Regards,
Doug Miller (alphageek at milmac dot com)
It's time to throw all their damned tea in the harbor again.
The new rules for auto donations over $500 require that (in most
cases) charities actually sell the vehicle (even if it's to a junk
yard) and then you get to deduct whatever the charity received for
the car, once they inform you - in writing - of the amount received.
Gone are the days of deducting the highest book value listed for a
pristine used car when the donated vehicle was a piece of junk. See
http://www.irs.gov/pub/irs-pdf/p4303.pdf for more info.
However, as per that document, if the charity is going to make
"significant intervening use of the vehicle" then all you need is
verification from the chartity that the vehicle is worth what you said
it was.
For example, let's say I donate a beat up, broken down vehicle to the
auto repair program at a local BOCES. Regardless of the condition of
the vehicle, if the school plans to use the vehicle to teach auto
repair and as long as they agree (in writing) that the dollar amount
that I put on the donation form is valid, I can deduct a lot more than
the vehicle would be worth on the open market.
Been there, done that - the actual amount that my taxes were reduced
was more than I, or any charity, could have sold the vehicle for.
That _isn't_ what the link above (or the actual instructions for Form
8283 which is the required substantiating IRS form for over $500 to be
claimed or Pub 561) say at all. Even in the examples of "extensive
intervening use", the maximum allowable deduction is FMV. There's a
provision that if the charity documents they intend to make improvements
to a clunker and then resell it that the FMV based on the completion of
those improvements could be claimed, but still not over the "Blue Book"
sale price. Nowhere is there any indication of value over FMV for a
clunker even if it is to be used for educational purposes as you state
other than what if might reasonably be expected to bring after sale if
restored. But, even there, unless the value is under $500, on the
completion of that transaction if the amount received is less, you're
not entitled to more than that realized or $500, if less.
So, one would conclude if a receiving organization did what you suggest,
while undoubtedly not intending to help perpetrate tax fraud and
endanger their 501(c)3 status, they probably did and would likely have a
problem come an extensive audit...
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