I want to donate my 1996 Honda Civic with 130K milage. The TMV of this car is around 4K. very good running condition but got some mechanical problems. I don't want to sell this to a third party and would like to donate this to chartiy to get a good tax exemption.
Somebody suggested 1-800-Charity Cars. Do you guys have any other suggestions to get best tax break.
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Your local Boy Scout Council would be happy to take such a donation. They can issue you a letter indicating the donation, allowing you to deduct it on your taxes. I'm a volunteer scouter only, but if you PM me, I could research who to contact in your local area for you. It's really easy, I've done it before.
jind said:...would like to donate this to chartiy to get a good tax exemption.
...to get best tax break.
Unless you're in a 100% tax bracket or you lie about the true market value of the car, you'll always lose money donating cars when comparing the tax deduction vs. selling it outright.
ogg said:jind said:...would like to donate this to chartiy to get a good tax exemption.
...to get best tax break.
Unless you're in a 100% tax bracket or you lie about the true market value of the car, you'll always lose money donating cars when comparing the tax deduction vs. selling it outright.
from what i understand this is correct....tax code changed a few years ago; you used to be able to write off the KBB value of the car - now you can only write off whatever the charity/organization gets at auction.
again, just my understanding, but you will lose money by donating versus an outright sale.
people are looking all over for civic (ie, gas mileage), you'd have no problem selling it.
pennypicker said:ogg said:jind said:...would like to donate this to chartiy to get a good tax exemption.
...to get best tax break.
Unless you're in a 100% tax bracket or you lie about the true market value of the car, you'll always lose money donating cars when comparing the tax deduction vs. selling it outright.
from what i understand this is correct....tax code changed a few years ago; you used to be able to write off the KBB value of the car - now you can only write off whatever the charity/organization gets at auction.
again, just my understanding, but you will lose money by donating versus an outright sale.
people are looking all over for civic (ie, gas mileage), you'd have no problem selling it.
If its even halfway decently maintained, I can't imagine KBB being a 70% difference of TMV. Coming out ahead from selling it outright vs donating is simply a function of how tax breaks work in general.
Edit: Also, unless you already itemize, or plan to have other significant deductions, you wont be exceeding your std deduction.
Message edited by: pthor1231 on 2009-10-19 14:09:03 CDT
tripleB said:Sorry I have nothing to add, I figured this thread would be really important because of the caps lock title.there should be a subforum for topics in all caps.
pennypicker said:ogg said:jind said:...would like to donate this to chartiy to get a good tax exemption.
...to get best tax break.
Unless you're in a 100% tax bracket or you lie about the true market value of the car, you'll always lose money donating cars when comparing the tax deduction vs. selling it outright.
from what i understand this is correct....tax code changed a few years ago; you used to be able to write off the KBB value of the car - now you can only write off whatever the charity/organization gets at auction.
again, just my understanding, but you will lose money by donating versus an outright sale.
people are looking all over for civic (ie, gas mileage), you'd have no problem selling it.
There is an exemption in that new law if your donated car is refurbished and sold to a low income family you can claim KBB FMV. Your car might qualify for donation, though if they just sell it to fund overhead cost, you can only claim the sales price. I know of one program "vehicles for change" in MD. There is one in the northeast. Not sure how to find others.
theman2 said:tripleB said:Sorry I have nothing to add, I figured this thread would be really important because of the caps lock title.there should be a SUBFORUM for topics in all caps.Fixt.
jind said:I want to donate my 1996 Honda Civic with 130K milage. The TMV of this car http://www.fatwallet.com/forums/reply.php?catid=52&threadid=9604... around 4K. very good running condition but got some mechanical problems. I don't want to sell this to a third party and would like to donate this to chartiy to get a good tax exemption.
Somebody suggested 1-800-Charity Cars. Do you guys have any other suggestions to get best tax break.
If you want to give the car away to a charity, because you really don't want the car/don't need the money/don't want the hassle selling it, great. I have donated cars in the past to both goodwill and the kidney foundation. Both cars were clunkers. In each case the organization had a tow operator pick up the car and haul it away.
The tax break (if you itemize) is going to be the same regardless of the charity that you donate the car to. See publication 526 at the IRS site for detailed information on the tax deduction.
myadvice said:...The tax break (if you itemize) is going to be the same regardless of the charity that you donate the car to...Not necessarily so.
One way to get the largest deduction is to give the vehicle to a charity that will in turn give or sell it to a needy person or family below FMV and provide you a statement to that effect, in which case the donor may deduct the FMV.
Otherwise, if the vehicle is sold at auction, that's the most that can be deducted. That's true even if the car is sold at auction to a needy person (which was seen as a loophole).
So, find a charity that provides vehicles to needy people.
scrouds said:I should also add that you can claim fair market value if the charity uses the car. Find a local insttiution that is in need of transportation.If you have more dollars than sense, you can find a charity that has a charitable use for your yacht that will agree not to sell it for a certain period of time. Get rid of the money sucking boat and get a charitable contribution for the (hopefully) appreciated fair market value of the yacht.
theman2 said:scrouds said:I should also add that you can claim fair market value if the charity uses the car. Find a local insttiution that is in need of transportation.If you have more dollars than sense, you can find a charity that has a charitable use for your yacht that will agree not to sell it for a certain period of time. Get rid of the money sucking boat and get a charitable contribution for the (hopefully) appreciated fair market value of the yacht.
Land yacht? I've already met a yacht salewoman that got out of the yacht selling business in this economy.
Translation: My car has serious mechanical issues, and no buyer would pay anywhere near book for it. I want to write off the KBB "Good" condition by donating it.
You can't do this; as others have pointed out. The car donation loophole is gone.
no body noticed what I added in my first post. 1-800-Charity uses the cars for the needy people and you can deduct FMV into your taxes. I was wondering if any other org do the same thing. anyway, thanks everybody who responded to this.
gludlow said:Translation: My car has serious mechanical issues, and no buyer would pay anywhere near book for it. I want to write off the KBB "Good" condition by donating it.
You can't do this; as others have pointed out. The car donation loophole is gone.
EXCEPT, as others had pointed out, if the charity service the vehicle and either uses it as part of its operation, or donates or sells it at a reduced price to a low income family, then you can deduct KBB good value.
Message edited by: VerbalK on 2009-10-21 18:00:04 CDT
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