Jumat, 09 Desember 2011

Should You Give Your Car Away?

You can give your car to charity and deduct the gross proceeds from the sale if the proceeds are for more than $500. If the claimed value of the donated motor vehicle, boat or plane exceeds $500 and the item is sold by the charitable organization, the taxpayer's claimed value is limited to the gross proceeds from the sale. The charitable organization must notify the donor within 30 days of the sale of the amount of the gross proceeds. However, if the charity adds improvements to the vehicle, the charity must notify the donor within 30 days of the contribution. If the charity betters the vehicle then the donor may deduct the vehicle’s market value. Actually, it is much better if the Taxpayer can deduct the vehicle's market value, because there normally is quite a gap between perceived market value and actual proceeds, and this difference can literally be thousands of dollars. One car donation center states that it has processed over 500,000 car donations since 1992, which adds up to about 30,000 cars a year. Did you know that you can also donate boats and RV's? So if aunt Dora dies, and leaves her jalopy in the driveway then maybe this is an attractive way to get rid of the car especially since it does not start anyway. But wait! It is not that easy. Where is the Title to the car? Not in the glove compartment? You may have a problem. You may also have a problem if the title is joint, say Aunt Dora and Uncle Nick. If Aunt Dora died and UncleNick is still alive there will be all kinds of problems. How about vehicle emission controls, was the car equipped with them, were they disabled? When you make a charity car donation: You get free vehicle pick-up whether your car to donate is running or not. In some cases the company will actually put a new battery in the car to get it running again. You avoid confusing Department of Motor Vehicles paperwork or Smog hassles. How it works: Call a reliable Vehicle Donation company. They'll take your information over the telephone, they'll handle all the DMV documents, they'll pick up your vehicle , arrange an auction sale and distribute the proceeds to the charity. If your donated vehicle/vessel sells for under $500 the receipt you receive at the time the vehicle is picked up is all you need for filing your taxes. The actual net proceeds of a donated car seem to range around the $400 figure In all cases, a charity car donation is sold to the highest bidder by a well-established charity vehicle auction. You must have a certificate of title. Some companies will also guarantee that if your donated car gets a ticket after your donation date, they'll take care of the ticket for you and they zealously will fight it so you don't have to worry about it. The reason cars are sold by public auction is that people simply will pay more at an auction for your car than they will pay at a dealer. Also, if the car is running at the time of the auction people will pay more so it is advisable to get it to running condition when reselling it.

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