donating a car tax question

Has anybody here ever donated a car as a tax write-off?

If so, does it usually reduce the amount you owe to the IRS by the value of
the car, or is it some other weird formula.

I couldn’t find the info on the IRS site (still looking).


Rodney

Re: donating a car tax question

my guess, which is how most deductions work that it reduces the amount of
income being taxed, so if you made 20,000 and donated a $3000 car, you are
taxed on 17,000 instead of 20,000. the 17,000 may vary depending on whether
you can deduct the full amount of the car. The amount of the value of the
car they give you to write off
depends…http://www.smartpros.com/x45822.xml

Brian Wilmot

“Rodney Blackwell” <rodney@webdiscuss.com> wrote in message
news:co7oj0$22m$1@server1.darklock.com
> Has anybody here ever donated a car as a tax write-off?
>
> If so, does it usually reduce the amount you owe to the IRS by the value
> of the car, or is it some other weird formula.
>
> I couldn’t find the info on the IRS site (still looking).
>
> –
> Rodney
>

Re: donating a car tax question

Rodney Blackwell wrote:

> If so, does it usually reduce the amount you owe to the IRS by the value of
> the car, or is it some other weird formula.

Simple answer: the amount of your donation is deducted from your net
income. Of course, there are a variety of hitches and strategies.

Re: donating a car tax question

“Rodney Blackwell” <rodney@webdiscuss.com> wrote in message
news:co7oj0$22m$1@server1.darklock.com
> Has anybody here ever donated a car as a tax write-off?
>
> If so, does it usually reduce the amount you owe to the IRS by the value
> of the car, or is it some other weird formula.
>
> I couldn’t find the info on the IRS site (still looking).
>
Donation of an automobile is a charitable contribution and is taken as
such on Schedule A of the federal form 1040. The total used in Schedule A
is transferred from a supporting form that names the charity and relevant
information. The bugaboo here is that the IRS has targeted specific
charities (i.e. Amer. Heart Assn) and will challenge the value you take.
Many charities employ auction houses to pick up the donated vehicle and
sell it at auction. The charity never sees the vehicle.

The IRS position is that you (the donor) are entitled to the fair market
value of the auto and in cases of auto auctioning, this value is the price
at which it is sold - not the Kelly Blue Book value. The auction house is
supposed to notify the charity of the sale price and the charity is
supposed to notify you. It just doesn’t seem to work that way though. And
of all the players in this game, guess who gets audited!

Re: donating a car tax question

“Auntie” <castalidesSPAM@yahoo.com> wrote in message
news:coaqno$lk7$1@server1.darklock.com

> The IRS position is that you (the donor) are entitled to the fair market
> value of the auto and in cases of auto auctioning, this value is the price
> at which it is sold - not the Kelly Blue Book value. The auction house is
> supposed to notify the charity of the sale price and the charity is
> supposed to notify you. It just doesn’t seem to work that way though. And
> of all the players in this game, guess who gets audited!

Right now the fair market value is the blue book value. But that changes on
Jan 1st to the amount the charity sells the car for.

The local homeless shelter has been running an ad saying if your planning on
doing it do it now before the rules change.

Re: donating a car tax question

“JRM” <hotrodder@softhome.net> wrote in message
news:coc6l6$rgk$1@server1.darklock.com
> “Auntie” <castalidesSPAM@yahoo.com> wrote in message
> news:coaqno$lk7$1@server1.darklock.com
>
>> The IRS position is that you (the donor) are entitled to the fair
>> market
>> value of the auto and in cases of auto auctioning, this value is the
>> price
>> at which it is sold - not the Kelly Blue Book value. The auction house
>> is
>> supposed to notify the charity of the sale price and the charity is
>> supposed to notify you. It just doesn’t seem to work that way though.
>> And
>> of all the players in this game, guess who gets audited!
>
> Right now the fair market value is the blue book value. But that changes
> on
> Jan 1st to the amount the charity sells the car for.
>
> The local homeless shelter has been running an ad saying if your
> planning on
> doing it do it now before the rules change.
>
And what I wrote is the reality; this has been unwritten law for about a
decade. Now it will be on the books. Too bad for the charities. When
people find out that a blue book $3,000 vehicle sells for about $175 at a
chop-shop auction, they will find other places for their property. The
ones who will benefit are owners of vehicles in really bad shape - by
donating it, they get it towed away for free :slight_smile:

Re: donating a car tax question

Auntie wrote:
> The
> ones who will benefit are owners of vehicles in really bad shape - by
> donating it, they get it towed away for free :slight_smile:

I knew a guy who would spot an abandoned car on a rural property and go
ring the doorbell and offer to tow it away for free. If they accepted
he’d call a scrapyard who’d come and pay him $50 or $100 for the car and
take it away.

Re: donating a car tax question

“Winston” <dl@winston.org> wrote in message
news:cof7m4$r9o$1@server1.darklock.com
> Auntie wrote:
>> The ones who will benefit are owners of vehicles in really bad shape - by
>> donating it, they get it towed away for free :slight_smile:
>
> I knew a guy who would spot an abandoned car on a rural property and go
> ring the doorbell and offer to tow it away for free. If they accepted he’d
> call a scrapyard who’d come and pay him $50 or $100 for the car and take
> it away.

That doesn’t happen in most parts of the US anymore. Now almost all scrap
dealers and wreaking yards charge a fee to accept a car the fee depends on
how badly wreaked the car is. If some of the parts can be salvaged and sold
then the fee is lower if it’s a total wreck and around 70% scrap then the
fee is higher. But in all cases they charge the owner to dispose of the car
rather then paying the owner and picking up the car for free the way it used
to work.

Gary Stein

Re: donating a car tax question

“Auntie” <castalidesSPAM@yahoo.com> wrote in message
news:codu1b$mh9$1@server1.darklock.com

> And what I wrote is the reality; this has been unwritten law for about a
> decade.

An unwritten law isn’t really a law though, is it? :slight_smile:


Rodney

Re: donating a car tax question

Rodney Blackwell wrote:
> An unwritten law isn’t really a law though, is it? :slight_smile:
>

IRS (or Revenue Canada or Inland Revenue etc.) regulations are not the
law but they might as well be unless you want to be the one to go to tax
court to have them overturned. The law says give them credit for the
value of the car - the IRS makes the rules for how to determine the value.