subject: Car Donation Tax Deduction Is A Matter Of Choice [print this page] Car Donation Tax Deduction Is A Matter Of Choice
Most people do not even think of donating their used cars to charitable organizations for a tax deduction when it comes time to purchase a new one. The reason for this has to be that most wish to use the value of the vehicle to go toward paying off the new purchase. However, there are many reasons that make donating a used car to charity a great idea. The first reason of course, is the tax deduction that is gained by making a car donation.
To take advantage of a car donation tax deduction there are a few things a person will have to know about car donation tax deduction. If the value of the car is more than $5,000 a written appraisal of the vehicle will have to be obtained from a qualified appraiser. This has to be completed before the vehicle goes to the organization that it is being donated to.
Along with the written appraisal, a copy of a completed IRS Form 8283 should be provided to the organization, and the donor must receive a signed statement from the organization pertaining to the donation in order to receive the car donation tax deduction.
If the value of the car that is being donated for tax deduction purposes is $500 or less the above steps are unnecessary. The IRS will accept that value as correct.
Meeting IRS car donation tax deduction requirements will allow the donor to deduct the fair market value of the car. A sample of those requirements would be; the recipient organization makes specific use of the car, or improves the vehicle in major ways to cause it to gain in value.
It the charitable organization can do a variety of things with the vehicle in order to qualify it as a tax deduction for the donor. For instance, it can give the vehicle to an underprivileged family that has no resources for purchasing their own, or sell it at a reduced price and use the money to help the poor.
Choosing to donate a vehicle to a charitable organization, whether for car donation tax deduction purposes, or for any other reason is an honorable thing to do. The pride it gives to those who are able to it is incomparable. Helping others out of choice is the true meaning of charity. Getting a tax deduction should not be the only reason someone should take this kind of step, however, it does make the gifting an easier choice.
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