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Whether you’re a genuinely altruistic individual or just too
lazy to play used car salesman for a week, donating
used cars can be as
rewarding for its old owner as well as the
new car
owner. All it really
takes is a little research, a call to your local charity
(maybe, waiting for the free tow truck), and your day is
done. That’s a load off your back, a check in your wallet,
and a warm fuzzy feeling in your stomach.
Nowadays, the part about the check comes a bit later.
The last big piece of headline news was the Jobs Creation Act
of 2004, which determined that anyone donating a vehicle
whether it is
new
cars
or
used cars as of 1/1/2005
with a claimed value of more than $500 can only deduct the
actual gross proceeds (cash) it commands in the end. Owners
had been known to get a tad, shall we say, liberal, with their
appraisals; possibly stating a vehicle’s excellent condition
Retail value for a leaking 88 Hyundai with only three
cylinders left. So much for that problem.
But one can still get an accurate estimate of the amount,
which will most likely hover right around Fair Market Value.
The IRS defines FMV as “the price that property would sell for
on the open market” and breaks it down to the four factors of
1. the cost of the item, 2. sales of comparable properties, 3.
replacement cost, and 4. opinions of experts. Full fair Market
Value becomes relevant in cases where the charity plans to use
the vehicle instead of the usual choice of turning it around
and selling again. Look for such guides at your local library
or online. (For such a program for adaptable vans and
wheelchair vans )
A simpler way is to look up its bluebook
value – the Private Party value, not the Retail value. There
are predetermined criteria (interior wear, tire wear, rust,
type of title) for selecting its condition. Bluebook more
often than not provides a more generous estimate than the FMV.
There are various organizations that offer car donation
programs. Just remember to check that the organization is a
qualified one. Qualified charities usually carry the label of
“section 501(c)(3)” organizations;
www.specialkidsfund.org
is a 501(c)(3) nonprofit organization, making all
contributions tax-deductible. A full list is updated annually
in IRS Publication 78. Just visit
www.irs.gov/eo and look under the “Search For Charities”
topic.
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