Donating a car to charity california

TIPS FOR DONATING A CAR TO CHARITY

A charity that uses a donated vehile for transportation or hauling goods obviosly benefits directly from such a donation however in many cases the cas will be sold en masse either by the charity itself or by a dealer to raise funds for the charity. in the case of a dealer, the charity generally receivers a flat fee per car, sometimes as little as $45 per car.

Listed below are tips for donors who would like to donate a car to charity. Legislation in 2004 limits the donor's tax deductions for car donations to the price at which the charity sold the car.

* To recive the maximum tax deducation on your car donation, give it to a charity that will use the

vehicle in its operations or will give it to a person in need.

otherwise, your tax deducation will not be based on the dair market value, but will be limited to the

amount of money the charity receives from the sale of your car.

* Make sure the charity is eligible to receive tax deductible contributions. Ask for a copy your records of the organization's IRS letter of determination which verifies its tax exempt status

* Be sure that you get a receipt from the charity for your car donation.

*Be aware that non-cash donation are one of the most common triggers to an audit by the IRS, so you'll want to document the value of the car and keep records of it.

* If the car is worth more than $500, the donor must complete section A of IRS FORM 8283 and attach it to their tax return. Donors are required to file with his/her tax return a written acknowledgement from the charity. if the charity sells the car, the charity must provide the donor with a certification that the car was sold at "arms length" between unrelated parties and the sale price of the car within 30 days. in this case, the donor's tax deducations will be limited to the total amount the charity sold the car for. if the charity does not sell the car, it must provide the donor with a receipt 30 days of the sale. the charity may also required to provide certification to the donor stating hot it plans to use or improve the car and stating that it promise not to sell or transfer the car. penalties are imposed on charities that provide fraudulent acknowledgements to donors.

* If the car is worth $5,000 or more, an independent appraisal is necessary. the donor must alsofill out section B of IRS FORM 8283. for cars worth less than $5,000 use the kelley blue book the hearst black book, or a guide from the national auto dealers association (NADA) to determine the market value. make sure you use the correct figure for the date, mileage, and conditon of your car. picking the highest figure for your car model and year without taking into account other factors may not pass muster with the IRS.

* Take picture of the car and save eceipts for new tires or other upgrades to verify its value.