Car Donation

      If your aging Car began to need hundreds of dollars' to repairs every few months, you might considered donating it to charity. For years, giving a car to charity offered multiple benefits. You could get rid of your beater, help a worthy cause and pocket a sizable tax deduction. I said again: tax deduction! The IRS (Internal revenue Service) was allowing donors to deduct the "fair market value" of the donated car from their taxes. So donating the Car, whose market value was about $2,400, meant $792 off your taxes (assuming a 33-percent tax bracket). Every year, millions Americans donated their cars for this.

           Owner America's Car Donation Charities, one of many commercial fundraisers that give a percentage of profits to their charity members. Donations through such company went down 30-35 percent after the new law went into effect. American Congress tightened the rule to prevent taxpayers from exaggerating the value of donated cars. The IRS (Internal revenue Service) expects you to base the fair market value on every price you would get if you sold your car. Depending on your car's condition, its fair market value may be considerably lower than the amount listed in used car pricing guides catalog.
 

         Vehicles valued at less than $500, the deduction amount comes from the donor's own estimate of the car's value, even if the charity receives less money from its sale. Deductions that greater than $500 are limited to the proceeds of selling car, usually at auction. Since the biggest loss for consumers is for those who own higher-value used cars, should they give up hope of donating? Not at all. As one door closes, another opens. Although Congress has closed the loop-hole in the law, there is still a way to deduct full market value of your vehicle: If the charity uses the car itself to further its specific purpose.
 

Car Donation that Qualify for a Tax Deduction

Each one of you can deduct contributions to charity only if you itemize deductions on your Schedule A of Form 1040. You must take into account certain limitations on charitable contribution deductions. A vehicle held by you primarily for sale to customers, such as inventory of a vehicle dealer, is not a qualified vehicle. Your deduction cannot exceed 50% of your adjusted gross income. Other limitations may apply. On Publication 526, Charitable Contributions, provides detailed information on claiming deductions & the deduction limits. It also describes types of organizations that are qualified & not qualified to receive tax-deductible contributions. For Publication 526 is available on-line at www.irs.gov or by calling toll-free (800) 829-3676.

Car Donation, Determining the Amount You Can Deduct
          These rules on deductibility apply to donations of qualified vehicles. A qualified vehicle is any motor vehicle manufactured primarily for use on public roads, streets, and highways; a boat; or an airplane. Generally, the amount you may deduct for a vehicle (car-donation) contribution depends upon what the charity does with the vehicle as reported in the written acknowledgment you receive from the charity. Charities typically sell almost all vehicles that are donated to them. If the charity sells the vehicle/ car, generally your deduction is limited to the gross proceeds from the sale.

http://car-donation-california-vehicle.blogspot.com