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car donation two options


									Car Donation - Two Options

Car donation is a non-cash charitable contribution. You will have two
options during donating your car. You can give the car to a standard
charity, which will later sell your car and will use the money to run
their services. The other option is, you can donate the car to such a
charity, which will use the car for their operations.

The second option gives you more value than the first one. To qualify for
the tax deduction after donating a car, your entire deductions would have
to be superior to the standard deduction.

Assume that you donated your car to a charity that has 501(c) (3) tax-
exempt status. The charities usually sell far less than the market value.
After selling your car (that has a market value of $1000), it will
provide you a receipt that indicates the sells figure. Suppose they sold
the car for $400. If you are in the 33% tax bracket, you are allowed to
deduct $132 from your taxes. It means your $1,000 car gave you a $132 tax
cut; only this much is your personal gain.

If you donate the car to a charity that will use it as part of its stated
cause, it will allow you to ask 33% tax cut from the actual market value
($1000); meaning, $330 in your pocket. Clearly, the second option is
giving you more cash back.

Donating a car to a charity has multiple benefits. It is a way to get rid
of old cars from the garage which eventually earns a tax deduction
option; not to mention; you are participating in a worthy cause.

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