When you are making automobile donations, you might do it just for the emotional contentment or for tax deductions or for both. However, if you wish to get the benefit of IRS tax deductions for automobile donations you need to stick to certain rules. There are some precautions which you must pay note to while making automobile donations. Following these precautions will ensure that you are not troubled by the procedures and rules later and that you can make the most out of automobile donations.
Firstly, it is important to choose the right charity for automobile donations. You will obviously need to find a charity that accepts automobile donations. It should also have a proper system in place to first store and later dispose them off through donations and auctions. But the most important precaution while choosing a charity for automobile donations is to check if the charity is approved by IRS as per 501(c)3. Only then should you go ahead with your plans for automobile donations.
The charity usually gives you a sale receipt or statement with valid information as required by IRS, after the vehicle is auctioned off. This is important for your automobile donations to get you tax deductions from IRS. The sale receipt should have your information, information about the car and the price it fetched. Usually, for automobile donations, you also need a statement from the charity that it did not indulge in any transaction or exchange of goods and service in return to your automobile donations.
When you are making automobile donations to a charity, you might be able to request for a tax deduction equivalent to the market value of the car in some conditions. This is, when the automobile donations you make are further donated by the charity to needy families. Your automobile donations are evaluated based on the car condition, make and model. You must ensure that you have the certificate of title which you need for transfer of ownership. Also make sure that the insurance has been cancelled prior to automobile donations to avoid dealing with claims once the car is off your hand.
Written by CharityDispatch
tags: Automobile, Donations, Precautions, Should, Take