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Car Donation - Its Benefits and How You Can Enjoy Them Too The concept of car donation can, at first, seem a little strange. Why donate a perfectly working vehicle that could sell for hundreds of dollars? There are actually quite a few very good reasons to donate a car to charity though. Not only does it benefit the charity to which you’ve offered it immensely – much more than it could have helped you – but it is a fully tax deductible donation and one that does not cost you anything. Like any charitable donation, your car donation is full tax deductible. The IRS offers a flat deduction of $500 for any donated vehicle. The amount rises if the value of the car is significantly more, allowing you to deduct as much as the estimated salable price from your taxes. In this manner, you are actually making money from your car. The best part though is that you don’t have to worry about all of the footwork that goes into actually selling a used car. Forget the classifieds and those costly repairs. Just donate it and save your donation receipt. If the amount of the car is probably more than $500, you can wait for the charity to sell the car, something many of them do. After the car is sold, you can donate the amount for which it sold. Alternately, if the charity keeps the car for everyday use, deduct the fair market value of the vehicle as estimated by Blue Book or another valuing service. In addition to your standard 1040 tax form, you will need to have an 8232 vehicle donation form filled out to go with your taxes. The only time you do not need the 8232 form is if the value of the car is estimated below $500. Additionally, if the car sells or is valued at more than $5000, you will need to acquire an official appraisal from a professional source stating the value of the car. Additionally, a third party higher in the IRS will verify the sale and the value of the car. A charity car dealer is a great option for those looking to donate their cars quickly and bypass all the hassle of fixing up and selling their old vehicle. Don’t think you can offer them a car that would normally have significant value in horrible disrepair and deduct the full sale price though. These charity car dealers will deduct the full cost of repair from any donations before filing the paperwork and offering you your donation receipt. They will have all of the necessary paperwork on hand though and can make it much easier to donate and deduct the value of your car without worrying about audit or false value claims. When deciding where to donate your old car to, remember the amount of good it can do. Even for those charities that will resell the car, there is a real value in the clothing and food that money will buy for them. Just remember that your donation is not tax deductible for all charities. Check with your tax agent or the IRS online before donating your car to ensure the tax deduction is available for your car. Just remember that your beaten old vehicle can do a world of good for someone else.
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