Car Donation Services

 

To donate a car, you simply have to contact a car donation services and they take care of everything else. The amount of your car donation tax deduction is covered by the 2005 revised federal tax legislation on car donations. This legislation describes two possible amounts for your car donation tax deduction- the gross sales amount and the fair market value of your car.

Car donation services usually either refurbish donated cars first or sell them as is at auctions where the true fair market values of the cars are considered. So if the cars were donated to them at a bloated fair market value, the amount that the car was sold for did not match this bloated value The 2005 car donation tax legislation revision corrects this error by allowing only the gross sales amount of the donated cars as the donor's tax deduction.

Car donation services do not always sell donated cars. If the donated car is used this way by the car donation services, the revised car donation tax legislation allows that the fair market value of the car is used as the donor's tax deduction.

The fair market value of a car donation is the amount used for the donor's tax deduction. The necessary paperwork that the IRS needs for the fair market value tax deduction is an acknowledgment receipt issued by the car donation services. This paper must state that the car is used directly for their charitable causes, the donor's tax identification number or social security number and the car's identification number. Donating a car and reducing your taxes is very convenient and easy. There are already numerous car donation services online.

What to Look For in a Car Donation Site

 

Almost every car donation center is supporting some charity or the other. Many car donation portals have a list of charities they support and publish. Donation centers support such charities by donating the proceeds of your used car sale to a charity of your choice or theirs.

However, there are cautions to be observed when donating your car to a donation center. You will only be able to avail of these benefits if you donate car to a charity listed with the IRS. If the car donation center or the charity your car lands up with are not listed with the IRS you will not be able to claim tax deductions on the transaction. The car donation service should also be able to give you good unbiased advice. The wrong advice concerning the donation of your car will end up with you not being able to claim deductions. The rules are very clear on car donations that exceed a sum of 500 USD. There is a limit on the permissible amount of car donations. The limit amounts to the gross amount that the charity obtained through the car donation sale.

Some car donation centers will just send the car in for auction and let it go for the best bidder. The better car donation centers will look for a needy family that needs a vehicle so that you will get the market value for your car and claim the amount on your tax returns.