Information about car donation tax deduction

By donating a second hand car, or even a scrap vehicle, to a charity like Purple Hearth, Goodwill or Red Cross, an individual might be eligible for tax deduction for such car donation. The IRS takes into consideration that taxpayer that donated their second hand cars saved a huge amount towards taxes amount to six hundred fifty four million dollar. It was prior to enhanced car donation tax deduction limitations starting in the year 2005 that restricted the needs in respect to a qualified donation. Till now, a resident of US might be capable of taking advantage of this tax waiver if her or his charitable donation qualifies. This information is a reference, for up to date official information, and you should verify the present year’s IRS instructions and forms.

Various kinds of vehicles could be donated to charitable organizations for getting tax deduction and it does not remain confined to cars only, however, trucks, motorcycles, and even airplanes and boats in few cases. In order to qualify, the vehicle should be intact and whole and have been prepared for being utilized on public roads excepting airplanes and boats. A car reserved as goods to be marketed to clients does not qualify for tax deduction on account of car donation.

The other significant thing prior to donating your vehicle is assessing the same in a correct manner. Various guides are there in the market which provides detailed instructions, so as to determine the actual valuation of your car, based on its accessories, general condition, mileage and age. After ensuring that you chose the proper charitable organization and the maximum evaluation, you should know the fact that you need to complete and enclose an IRS form for your tax return in the event you are opting for an auto donation which amounts to five hundred dollar or above. Donating a second hand car to charitable organization is an ideal solution in the event you are thinking about to buy a new vehicle or whether you are just willing to donate to a charitable cause.

Becoming aware and following few steps prior to the actual auto donation avoids future worries, since it turns the procedure a fulfilling and safe one. Initially, not each second hand donation programs of car are being conducted legally. Prior to you making your donation of the car you should verify with the authorities of IRS whether the charity is within the purview of the act under 501 (c) (3) of the IRS Publication.