Giving Your Car To Charity The New Tax Rules

Giving Your Car To Charity The New Tax Rules



Giving Your Car to​ Charity – the​ New Tax Rules
The IRS has changed the​ regulations on​ donating vehicles to​ charities .​
If you​ donated a​ car last year,​ you​ need to​ read the​ following to​ understand the​ new rules .​
Giving Your Car to​ Charity – the​ New Tax Rules
Millions of​ people donate cars,​ boats,​ RVs,​ motorcycles and many other forms of​ transportation to​ charities each year .​
While doing a​ good thing is​ one motivation,​ reaping a​ sizeable tax deduction is​ also a​ motivating factor .​
Unfortunately,​ the​ IRS has concluded that more than a​ few people were deduction very optimistic values for their cars .​
Instead of​ auditing everyone,​ the​ IRS simply changed the​ deduction rules for vehicle contributions to​ charity .​
If you​ donated a​ vehicle of​ any sort to​ a​ qualified charity,​ but claimed less than $500 as​ a​ deduction,​ you​ can stop reading .​
The rule changes don’t apply to​ such situations .​
If you​ are claiming a​ deduction in​ excess of​ this amount,​ read on.
The new IRS regulations are pretty simple to​ understand .​
If you​ donated a​ vehicle to​ a​ qualified charitable organization,​ the​ amount you​ can deduct is​ the​ exact dollar value the​ charity receives when it​ resells the​ vehicle .​
Put another way,​ you​ can no longer claim the​ blue book value of​ the​ car .​
The IRS wants to​ know what it​ was really worth,​ not what it​ would be worth if​ you​ hypothetically repainted it,​ got new tires,​ rebuilt the​ engine and so on​ .​

Charitable organizations are more than aware of​ the​ new regulations and they will more or​ less take care of​ everything for you​ .​
To donate a​ car,​ you​ simply arrange for delivery to​ the​ charity .​
The charity will then resell the​ car at​ some point in​ time .​
The organization will then will send you​ correspondence detailing the​ gross proceeds from the​ sale of​ the​ vehicle.
This correspondence should,​ but is​ not required to,​ come to​ you​ as​ Form 1098-C .​
Yes,​ another form .​
Simply take the​ deduction for the​ gross proceeds on​ Schedule a​ and attach the​ Form 1098-C to​ your tax return .​
If the​ charity sends you​ a​ written letter,​ attach that to​ your tax return .​
While the​ above may sound overly burdensome,​ it​ really isn’t.




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