Vehicle Donation Charities and The New IRS Car Donation Tax Law

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New IRS Tax Law Vehicle (Car) Donation Charities Information

"CHARITY CARS" is committed to providing the public with the most informative information regarding the new vehicle donation laws. We are sincerely grateful for those who have donated in the past and who are considering making donations in the future to help those less fortunate. Because Charity Cars is a very different car donation charity, your donation to our non-profit organization creates hope for disadvantaged families trying desperately to survive on their own. We truly appreciate your time and concern.

Beginning January 1, 2005, new federal tax legislation governing vehicle donations went into effect. The following is a summary of the new legislation contained in (HR 4520).

Under the new law, allowable deductions for charitable contributions of vehicles, boats and airplanes (collectively referred to as "assets" in this summary) for which the claimed value exceeds $500 will depend how the asset is used by the recipient charity. If the organization sells the asset without any significant intervening use or material improvement, the donor's deduction is limited to the gross sales proceeds received by the charity. But, if the organization uses the asset in direct furtherance of its charitable purpose the donor may deduct the "fair market value" of the asset. (According to the IRS, the donor, not the recipient charity, must determine the "fair market value" which the IRS describes as the price that a willing buyer and willing seller would agree upon if neither were pressured to do so. Assistance with vehicle values can be found at Kelly Blue Book's web site)

Examples:
If a vehicle with a "fair market value" of $4000 is donated directly to the non-profit charity and the organization sells the vehicle for $1000, the donor can only deduct $1000. But, if for instance, the organization provides the vehicle to a disadvantaged person, the donor may deduct the full "fair market value" of $4000.

Substantiation requirements when the claimed value exceeds $500 are as follows: No deduction is allowed unless the donor receives a written acknowledgement from the charity. That document must include the name and taxpayer identification number (social security number) of the donor and the vehicle identification number (or similar number) of the asset.

Additional documentation is required but is dependant on how the asset is used by the charity.

In the event the charity sells the asset without any significant intervening use or material improvement, the charity must send a written acknowledgement to the donor within 30 days of the sale certifying (1) that the asset was sold at an arms length transaction between unrelated parties, (2) the amount of the gross sales proceeds, and (3) include a warning that the donor's deduction is limited to the sales proceeds.

If the charity intends to make significant use of the donated asset (such as providing a donated vehicle to a disadvantaged person) or make material improvements, the required written acknowledgement must be provided within 30 days of the contribution and must certify: (1) the intended use and duration of such use or the material improvements to be made and (2) that the asset will not be transferred in exchange for money, other property, or services before completion of such use or improvements.

Click here to read about the new car donation process.

Donate your vehicle to the original CHARITY CARS Online:
Charity Cars Online Car Donation Form online
or by Calling Tollfree 1-800-CHARITY (1-800-242-7489)

website: http://www.800charitycars.org/
email: info@800charitycars.org

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More pages & information about 'Charity Cars' vehicle donations, tax deductions & helping families.

• Car Donations to Charity Cars Helps Families


• Vehicle Donations - 501c3 Info About Charity Cars


• Donate a Car Online to Charity Cars, a 501c3 Nonprofit


• Car Donations to 'Charity Cars' are Helping Families


• The 'Charity Cars' Donation Process


• Car Donate FAQ's from 'Charity Cars'


• Car Donations Questions? Call Charity Cars Tollfree 1-800-CHARITY


• Vehicle Donations and The New IRS Car Donation Tax Law


• Donation Recognition for 'Charity Cars'


• 'Charity Cars' - Donations & Eligibility


• Donate a Vehicle - Cars for Military Families In Need

DISCLAIMER:
* Based on the fact that the vast majority of donated vehicles are not eligible to be 'program' cars (Charity Cars bases its decisions on many factors including, but not limited to, year, make, model, mileage, condition, location, recipient, repair and funding limitations.) and since placing a vehicle with a client is the exception rather than the rule, donors should assume that their vehicle will be sold at auction or for salvage with the proceeds returning to Charity Cars, Inc. (unless notified in writing that their vehicle will be provided to a disadvantaged person). Although most of the vehicles donated are not of sufficient quality to be 'program' cars, Charity Cars appreciates each and every car donation as they all help to fulfill our missions!

PRIVACY STATEMENT FROM CHARITY CARS, INC.
Charity Cars collects non-public personal information about you. Charity Cars does not disclose any non-public personal information about you to anyone, except as permitted by law. Your confidence in Charity Cars is important and we want you to know that your personal information is safe with us. If you have any questions or concerns, please contact us at Charity Cars.

Thank you for your continued support, and please... when you find you are in the position or need to donate a car, think of Charity Cars first.

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