Car donation for charity is a great action of kindheartedness that you donate to others less lucky than yourself. You will also find great tax deduction with car donation and will get self satisfaction that you are fulfilling someone’s needs. To get most of benefits from car donation regarding tax saving, you will have to follow some rules.
First step is to choose the most appropriate donation trust that provides you most of donation benefits. Now a day, there are many donation trusts through the states. You must take some time in making research you really have confidence in and can observe your donation being a true difference to those destitute.
You need to ensure that donation trust is approved with IRS standards so that you would not face any problem in claiming the tax deduction. You can also check their approval from IRS Publication list of eligible trusts.
You must also have got the receipt within 30 days from the trust confirming that you have got gross from the sale of donated car. If they would like to keep the car in their own use then they must confirm you within 30 days. Then you will be able to use fair market value for claiming tax deduction.
If the gross amount of your donation is between $500 and $5000 then you needs to fill section A of IRS form of tax return and if it is over $5000 then you need to fill section B of the form. If your donation is sold, then you need signed receipt from trust’s worker and if it is kept by trust then you need signed paper showing the value of donated car.
If you decide to deal with an agency then they will cut some part of donation value as their commission. They can demand a set percentage of donation value as admin charges. If your donation is valued at low price then it is not good to give them a specific amount from donation’s value. In this way, they can take big part of your donation. The percentage also varies from one agency to other.
One more main point while donating is not to leave empty the car ownership fields on possession transfer forms. Some trust want to remain them blank to save time when selling the car and then transferring ownership to other.
When making donation of a car to your favorite trust, you would make good background search to ensure that your donation is going for really a needy one.
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