The Requirements For A Used Car Donation


Defined Tag: Used Car Donation.

Used car donation benefits two people: the recipient as well as the donor. The recipient, of course, would be able to use the vehicle so donated for a variety of purposes. A foster home, for example, can use the car to drive its children from the center to excursion points. A public hospital can use the vehicle as one of their ambulances. A senior's home can use the same vehicles to ferry supplies to the center.

The donor isn't left out in the picture. For his used car donation, he can claim a tax write off. The rules for this are as follows:

* If the charity recipient would use the vehicle for its own purposes, the donor can receive a tax deduction equivalent to the fair market value of the said vehicle.

* If the charity recipient would opt to sell the vehicle, the donor can receive a tax deduction equivalent to the value the said vehicle was sold for, or $500, whichever amount is higher.

To make use of these tax benefits for used car donation, the donor must make sure that the following things are accounted for:

* The charity institution that you want to designate as the recipient of your old vehicle should be a qualified charity under section 501(c) (3) of the Tax Code. If you're not quite sure about this, you could always inquire with the IRS by reaching them through their official website at www.irs.gov .

* You have to itemize your tax deductions. This can be done by filling out Schedule A of your IRS Tax Form 1040.

* You have to determine an initial approximation of your old vehicle's value. There are certain steps dependent on the perceived value of the car you wish to donate. For example, if your used car is worth an amount below $250, you only have to write the down the specifics of the donation. But if your used car's approximated value is ranges from $250 to $500, you'd have to demand written acknowledgment from the charity institution. A used car with a value ranging from $500 to $5,000, on the other hand, would have to fulfill all of the requirements above, as well as IRS Tax Form 8283. Used vehicles with a value above $5,000 require more stringent requirements.

In any event, a used car donation is by far a better option than keeping a vehicle you will no longer use. Indeed, that vehicle may have served you well throughout the previous year. But you could give it a grand sendoff by allowing it to fulfill some charitable ends, and in the process, benefit youself with much needed tax write offs as well.