Deducting Vehicle Donations

Many organizations advertise for donations of old cars, trucks, boats and recreational vehicles and deducting vehicle donations. This can be a great deal if you take advantage of deducting vehicle donations. The American Diabetes Association and Mothers Against Drunk Driving are two charities that accept cars from people who plan on deducting vehicle donations.

Keep in mind that the IRS determines a vehicle's worth by its fair market value when deducting vehicle donations. If you plan on deducting vehicle donations, it is best to research your car's value before you give it away. If you and the donation organization cannot agree on its value, it will be too late if you have already donated the car.

Make sure you save all documentation on the vehicle from the charitable organization. This should include a fair market value assessment and documents pertaining to the 501(3)c tax status of the organization. If the organization is not a federally recognized non-profit, then you will be disappointed because IRS will disallow your deducting vehicle donations that are not to established non-profits. You can check the charity's status through the IRS website. You may also want to determine how much of the vehicle's value will be received by the charity. If the organization is a for-profit front for a charity, then the organization will receive up to 90 percent of the money before the charity ever sees a dime.

Once you establish that the non-profit is worthy, then you should have no trouble deducting vehicle donations on your federal taxes. You will have provided money to a charity or a good car to a family in need. And you will find that deducting vehicle donations can be a lot easier than selling your old car.
The best thing about deducting vehicle donations is that you don't have to wash your car or get it repaired to take advantage of this win-win situation.

Author: L. Kaylen, Car Donation & Deduction Service Reviews