Car Donation - Charity With Clarity

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					Car Donation: Charity With Clarity

A search about how to donate an old car will yield thousands, if not
millions of results. All of them claiming how easy it is donate an
automobile, so easy that all you have to do is pick up the phone and
they’ll be at your door, tow truck in hand; not only that, you get tax
breaks too.

The Truth Of The Matter

The truth of the matter is, donating a used car is not as easy as they
say it is. Aside from differing state regulations, the IRS has set
sanctions on car donations due to rampant fraud. For example: the state
of California requires a donor to fill up a liability release form, while
Maryland asks for the “Maryland Notice of Security Interest Filing”. One
thing in common for all states though, is that they all require the Car
Title as a prerequisite for contribution.

Finding A Qualified Charity

The most important part of giving away your car for a good cause is to
look for the right charity. Finding an institution with the same agenda
as yours is akin to interviewing an applicant for a certain position. The
pivotal move is to ask questions. Some charities have a number of
programs and may be flexible in assigning your donation to a certain goal
in which you and the charity officer agree on. Unfortunately, there are
some who have a specific set of purpose.

To qualify for write offs, the donation must be made to an IRS qualified
charities or the following: religious organizations; state, federal, and
government institutions (as long as the car donation is for public use);
Non-profit hospitals and schools; Red Cross, Good Will, Meals on Wheels,
Care, Salvation Army, and the Girls’ and Boy Scouts of America; and those
listed in the IRS’ publication 78. A donation is not tax deductible when
it is made to an individual.

Preparing For The IRS

A car title is a strict requirement for donating a car. Prepare the 1040
form and fill up schedule A. The amount of deduction is limited to 50% of
the already adjusted gross amount of your income. The write off is based
on the cost at which the charity sold your car (if more $500), or the
fair market value if the car is less than $500.

Do not forget to take note of the location at which you donated your car,
the charity and its address, the condition of your car, and the
contemporaneous written acknowledgement of your contribution. All these,
are needed for you to avail of the tax deduction. You have to submit all
of these requirements at an IRS Specified deadline or else you cannot get
a write off.

It is important to keep a second copy for your file, just in case. The
great thing about all this is that the IRS actually has a number of
hotlines ready to answer any questions you may have. Aside from that, an
online list of charitable institutions, rules and regulations, and
guidelines on how to determine the amount of your deductible are also
available.

Doing Good And Profiting

No good deed goes unpaid. In this case not only do you help others, you
also help yourself. Don’t be deterred by all the requirements for car
donation, rules and regulations are there to benefit you. After all would
you want unscrupulous people using donation to meet dishonest ends?

				
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posted:11/4/2012
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