Many charities now accept car donations as a method to fund or further their principal mission. Some accept the donations directly; others take car donations via a third-party that really collects and sells the autos for the group. Have you ever ever wondered what charities do with the car donations they obtain? If you've never asked the question and therefore are considering give a car to charity, you really should, because what the organization does with your donated car will impact how much you can deduct for the contribution on your taxes.
For The Charity's Own Use
In a few instances, the charity may keep your contributed car for its own use in carrying out its mission. These are probably the least common types of car donations, and usually the organization is a small, local charity with use for a car, for example, to pick up and deliver kids to activities or to deliver meals to shut-ins. If an organization keeps your car for its own use, you're allowed to deduct up to the full Blue Book value of the car from your taxes, based on the local valuation of the vehicle.
For Donation to Disadvantaged Families
Numerous charities throughout the country gather donated cars, repair and refurbish them, then give them to disadvantaged households who need a working vehicle. These charities often work with families and children, and their intention is to help a family become self-sufficient. The car may help an adult in the family get a job or keep a job in a place with no public transportation, or it might allow parents to transport a disabled child to needed treatment and doctors' appointments. Based on the charity and the conditions, the charity might give the automobile to the family at no cost, or it may sell the car to the family at a nominal cost. Once the charity repairs a donated car to provide it to a disadvantaged family, you can usually deduct the actual value of the car on your taxes.
For Sale at Auction
Often, organizations that take automobile donations don't have any need for your automobile itself. Instead, they are thinking about the monetary worth with the vehicle. Usually, they are bigger charities that take car donations nationwide, and frequently function with a 3rd celebration to deal with the real assortment and sale of donations. In this case, the organization collects the car and sells it, either to a private party or at auction, occasionally following making significant repairs towards the vehicle. Whenever you donate an automobile to an business that sells it at auction and uses the proceeds to fund its work, your charitable tax deduction is restricted to the amount the charity recognized once they offered your car. So, in case your automobile is valued at $4,900 along with a charity only gets $250 for it, you'll only be able to deduct $250 on your taxes.
For Sale as Scrap
Lastly, some charities accept junk car donations or donations of non-working autos with the intent of selling them to a scrap yard. In this situation, they will not bother with making repairs and will only take a junk car in the event the amount they can get for it exceeds the costs of administration and towing. As when the organization sells your car at auction, your tax deduction is limited to the amount that the charity realizes from your donation. Car donations could be a win-win proposition, both for you and for the organization to which you make your contribution, but it is important to be aware of all the legalities before you make your donation.
For The Charity's Own Use
In a few instances, the charity may keep your contributed car for its own use in carrying out its mission. These are probably the least common types of car donations, and usually the organization is a small, local charity with use for a car, for example, to pick up and deliver kids to activities or to deliver meals to shut-ins. If an organization keeps your car for its own use, you're allowed to deduct up to the full Blue Book value of the car from your taxes, based on the local valuation of the vehicle.
For Donation to Disadvantaged Families
Numerous charities throughout the country gather donated cars, repair and refurbish them, then give them to disadvantaged households who need a working vehicle. These charities often work with families and children, and their intention is to help a family become self-sufficient. The car may help an adult in the family get a job or keep a job in a place with no public transportation, or it might allow parents to transport a disabled child to needed treatment and doctors' appointments. Based on the charity and the conditions, the charity might give the automobile to the family at no cost, or it may sell the car to the family at a nominal cost. Once the charity repairs a donated car to provide it to a disadvantaged family, you can usually deduct the actual value of the car on your taxes.
For Sale at Auction
Often, organizations that take automobile donations don't have any need for your automobile itself. Instead, they are thinking about the monetary worth with the vehicle. Usually, they are bigger charities that take car donations nationwide, and frequently function with a 3rd celebration to deal with the real assortment and sale of donations. In this case, the organization collects the car and sells it, either to a private party or at auction, occasionally following making significant repairs towards the vehicle. Whenever you donate an automobile to an business that sells it at auction and uses the proceeds to fund its work, your charitable tax deduction is restricted to the amount the charity recognized once they offered your car. So, in case your automobile is valued at $4,900 along with a charity only gets $250 for it, you'll only be able to deduct $250 on your taxes.
For Sale as Scrap
Lastly, some charities accept junk car donations or donations of non-working autos with the intent of selling them to a scrap yard. In this situation, they will not bother with making repairs and will only take a junk car in the event the amount they can get for it exceeds the costs of administration and towing. As when the organization sells your car at auction, your tax deduction is limited to the amount that the charity realizes from your donation. Car donations could be a win-win proposition, both for you and for the organization to which you make your contribution, but it is important to be aware of all the legalities before you make your donation.
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