A Car Donation With Cash Back - Even The IRS Says OK
You’ve got an old car which just doesn’t get driven much any more. You hate the idea of putting an ad in the classifieds and having who know who cruising your street to get a look at it, but you don’t particularly relish the idea of having to deal with a used car salesman either. But there is a third alternative, which will give you a chance to put your old vehicle to good us, and give you a nice tax break as well. What is it?
Well, if you’ve ever given your used clothing, or household appliances, or outgrown toys to the Good Will or Salvation Army, or even the church rummage sale, you have charitable spirit and are to be commended for it. But did you know that there are literally hundreds of charities, all over the US which will eagerly accept your car donation? And, with the tax deduction you’ll receive in return, you’ll actually be performing a car donation with cash back.
Where Your Cash Back Will Come From
The cash in the “car donation with cash back” equation does not mean that you will somehow walk away from you donation with a fistful of dollars. What it does mean is that, when tax filing time rolls around, you’ll be able to claim the greater of the full book value of your donated car, or its full sales price should the charity decide to auction it off, as a charitable deduction on your tax return. That by itself might be enough either to lower your tax payment or to increase your tax refund. Car donation with cash back indeed!
Car Donation With Cash Back: The IRS’ Rules
While that may sound a bit cynical, the truth is that many people become attached to their long-time possessions, and receiving any sort of monetary bonus can make the ides of letting them go just a bit more palatable. Even the IRS, of all institutions, recognizes that people need incentives to be charitable, and charities need a way to provide those incentives.
The IRS, in fact, has gone out of its way to encourage you to make a car donation with cash back in this fashion. If the charity to which you donate you car chooses to put it to work in the service of their efforts, you will be allowed to deduct its fair market value, as determined by Kelly’s Blue Book.
If the car you donate is sold to raise money for the charity, you will be allowed to deduct the amount for which it was sold, unless that amount is less than Blue Book value. Then you go with the FMV.
Either way, you are making a car donation with cash back in return; you don’t have to do a thing but fill out the paperwork; and the charity will even send someone to collect your old friend and see it safely to its new home!
You can also find more info on Car Donation and Charitable Car Donation. 1cardonationservices.com is a comprehensive resource to know about Car Donation.
Source: www.isnare.com
