Tax Benefits
Car donations charity in USA and also car donation charity in Canada have become a huge tax saving opportunity for most of the tax payers in both the countries. From the view point of the charity organizations the program “donate a car for charity” is a boon, most of these not for profit organizations utilize this program to keep their events up beat and pay out miscellaneous and other bills.
These charities could be segregated into different categories, for example some of them having their own car loads of donated cars try to sell off these cars to potential buyers and utilize them for fund raising of other charities and or indulge in doing some other community work.
If not directly some of the charity organizations take help from the intermediaries to get donated cars from the donors and will make some part of the profit, though much of the auctioned car profit goes to the intermediaries.
And also most of the charity organizations do take it to the car auction service and through a company try to dispose them off to the interested parties through bidding.
The donors get a good reprieve on their tax cut, sometimes almost similar to the amount of the donated car. The points which you need to remember while you intend to donate a car to a charity for tax benefit are:
- Ask from the charity IRS letter of determination which entails it to take tax deductible contributions, this will determine if the organization is listed among the charities which accept car donations.
- Make sure when you make the charity you get the receipt of your donation. This will ensure that if IRS triggers an audit you are with all the supportive documents of making your non-cash donation like your car donation charity.
- Donating a car for charity is a smart move, but you have to be aware of certain facts which cover’s your donation. Hence read out the documents completely yourself or take your acquaintance who knows how to make a charity of car. This will ensure the process smooth and easy.
Further Reading:
Effective Tax Planning and Charitable Car Donation in USA for Tax payers