Before you pass on your car / boat over to someone, read the under mentioned tips. These will help you ensure that you are making the right moves and your donation makes a difference!
Avoid Middlemen: Number of for-profit intermediary firms promote extensively on TV, billboards etc, offering help in donating your vehicle to charity. These organizations generally keep almost 50 to 90 percent of the vehicle’s cost with them, and the charities don’t get what they should have gotten. To ward off this situation, see if you can directly donate charities you admire.
Find a Worthy Charity: If the charities you support aren’t equipped to accept such donations, conduct some homework and find a nice charity. You can also track the track records of charities online. More details on this can be found here.
Calculate the Math: If you bound to use an intermediary organization due to your busy schedule at least just make sure how much of the car or boat’s value will be offered to the charity. If the organization offers charities flat fees you may not apply for tax deduction.
Know the Status of your Recipient: In order to apply for a deduction, the charity should be an IRS-approved 501(c)(3) organization. You can visit the Internal Revenue Service’s Web site and search for Publication 78 to search out qualifying non-profit organizations.
Do the Delivery yourself: After you’ve identified a worthy charity, it will have to pay someone to pick up your car or boat. To enable the charity retain maximize benefit of your donation, deliver the car or boat off yourself.
Transfer the Vehicle Carefully: If you want to eliminate all risk associated with running up parking tickets and other offences after you’ve donated the vehicle then re-title the vehicle to the name of the charity, and inform the transfer to your state’s department of motor vehicles or licensing. Never leave the ownership space on the charity donation papers blank for whatsoever reasons.
Your Estimate of the Donation’s Value Probably Won’t Cut it: If the cost of your car or boat is more than $500, the IRS will ask for evidence of how much the charity got for it. You should get a written receipt from the charity indicating exactly how much money it generated.
Know When you can Get the Fair Market Value: You won’t need to substantiate the sales price if the charity retains the car or boat and uses it to perform its charitable tasks. If the cost of your donation is less than $500, then you can inform its fair market value driven by the listings from Kelley Blue Book and identical sources.
Keep a Thorough Paper Support: If the value of your donation crosses $500, you’ll have to annex IRS Form 8283 to your tax return. In case, its value crosses $5,000, your supporting must have an outside appraisal. You’ll also require evidence of the donation, like a written acknowledgement from the charity and a copy of the title change.
Be Detail-oriented: This paper details may appear to be tiring and time consuming, but think about it. This might be one of the biggest charitable donations you have ever made. By taking the time to ensure that the charity gets the maximum benefit and you get the greatest possible deduction is the ideal way to wind up this issue.