What Determines Their Tax Deduction Value
Car Donations has become a big operation and a way for charities to finance themselves. If you look on the Internet, you see the Salvation Army in local areas, and other charities having regular car auctions. In this way, charities can rapidly turn your car donation into cash that they can use for any purpose to fund their operations.
In fact various charity services programs actually do this operation very directly. They put your car up immediately for auction or for salvage purposes. Salvage purposes is the way that many cars that are difficult to repair can still be valuable. They can be salvaged for their better parts to be used as spare parts, with the rest of the car melted down for the metal or for recycle.
In a small number of cases, the cars donated are in good enough conditions that with minor repairs they can be made workable, and given to a family in need, or used by the California vehicle donations program in their day to day operations.
Now under the new IRS regulations of 2005, there is a very interesting little technicality in car donations. If you donate the car to a charity it can have two radically different cash values as a tax donation.
Say you are donating a year 2000 Toyota Camry, with a fair market value of $3,500. If that vehicle is directly auctioned by the charity, and sold for $1,000, legally, that is all you can deduct from your taxes.
However, if that Toyota Camry is given to a disadvantaged family, or used in the charities other operations, then you can deduct the full value of $3,500. That is a big difference. You need to get substantial documentation of the sale or use of the car from the charity for the California vehicle donations record keeping.
This documentation must include your social security number or tax payer's ID number, and also the VIN (Vehicle Identification Number). The charity must inform you as to whether the car was sold as a vehicle, or salvaged for parts for how much it was sold for, and do this within thirty days.
Or if the vehicle is used by a disadvantaged person or family, or other organizational purposes, this can also be documented within thirty days. This must be done for all vehicles that have a value of more than $500. At least it's easier to get rid of your car this way, than start running ads in the local paper and seeing prospective buyers.
In fact various charity services programs actually do this operation very directly. They put your car up immediately for auction or for salvage purposes. Salvage purposes is the way that many cars that are difficult to repair can still be valuable. They can be salvaged for their better parts to be used as spare parts, with the rest of the car melted down for the metal or for recycle.
In a small number of cases, the cars donated are in good enough conditions that with minor repairs they can be made workable, and given to a family in need, or used by the California vehicle donations program in their day to day operations.
Now under the new IRS regulations of 2005, there is a very interesting little technicality in car donations. If you donate the car to a charity it can have two radically different cash values as a tax donation.
Say you are donating a year 2000 Toyota Camry, with a fair market value of $3,500. If that vehicle is directly auctioned by the charity, and sold for $1,000, legally, that is all you can deduct from your taxes.
However, if that Toyota Camry is given to a disadvantaged family, or used in the charities other operations, then you can deduct the full value of $3,500. That is a big difference. You need to get substantial documentation of the sale or use of the car from the charity for the California vehicle donations record keeping.
This documentation must include your social security number or tax payer's ID number, and also the VIN (Vehicle Identification Number). The charity must inform you as to whether the car was sold as a vehicle, or salvaged for parts for how much it was sold for, and do this within thirty days.
Or if the vehicle is used by a disadvantaged person or family, or other organizational purposes, this can also be documented within thirty days. This must be done for all vehicles that have a value of more than $500. At least it's easier to get rid of your car this way, than start running ads in the local paper and seeing prospective buyers.