|
Why should you donate a vehicle?
Let's face it, "trading-in" your vehicle to a car dealer
is very easy and in many cases, trading-in is the best way to get rid of your
used automobile. However, many auto dealers will not want a vehicle trade-in
that is too old, have too many miles, or is in need of repair. Selling these
types of automobiles is difficult, time consuming and costly. That's where a
charitable car donation can help you! The "donate car" transaction is handled
over the phone on a toll free number with zero cost and no hassles. Your
donated automobile is picked up within 1-2 business days and the process is
complete. If you try to sell it yourself you will have to: write the ad; pay
for the ad; suffer through strangers calling and coming to your house; test
drives; and many other problems. Who needs that kind of hassle?
The
charity will sell the car at an auction to raise money to support their
programs and you claim it on your taxes as a charitable deduction. Neat, simple
and no cost to you.
Which Charity to choose:
When you review the charity page take a moment to
read the paragraph about the programs and services they provide. Click the link
to their website and delve further or contact them if you like. They want you
to know about their services and why they need your support. Our charities
provide services for a large variety of causes, such as: children with cancer,
child mentoring, Autism, Multiple Sclerosis, people with terminal diseases,
animal rights activists, schools, religious organizations, performing arts,
hunger, homeless, the ecological environment, scouting, deafness and more. We
hope you find a charity that means something to you, one you would really like
to help.
How does the charity benefit?
When you donate a car, truck, van, mini-van, SUV or any automobile, the vehicle
is taken to a "Dealer-Only" auto auction to be sold to raise money for the
charity you selected. Vehicle Management Services and the charity will pay
vendors to tow your vehicle to the auction, prep it, clean it and run it
through the auction. The proceeds will then be split 50/50 by the charity and
Vehicle Management Services. All of the charities have contracted with Vehicle
Management Services to manage their auto donation program. Feel free to contact
the charity to confirm any of this information. We want you to be fully aware
of the process and comfortable with whom you are dealing.
IRS Guidelines
Prior to December 2004, the IRS would require the
vehicle donor to compile the " Fair Market
Value" of the vehicle being donated by obtaining the "Blue Book" value
as a starting point, then making adjustments based on the mileage and condition
of the vehicle. IRS publication #526 also provided examples of how to determine
the " Fair Market Value".
Effective January of 2005, the IRS initiated
new rules with regard to donation of vehicles to a charitable organization. If
your vehicle is donated to a charity that will use the vehicle for furtherance
of their programs and services (ie: you donate a truck or van, then the charity
uses it to deliver food to needy people), then you may still claim the "Fair
Market Value" under the old guidelines. However, most donated vehicles are sold
to help the charity raise money to provide their programs and services. The
vehicles donated to our charities are sold as a fund raising effort and
therefore, follow the new IRS guidelines.
The new IRS guidelines make it much easier to determine what
you may claim on your taxes. First, you should check with your tax advisor to
see if donating a vehicle will benefit you with regard to your tax deductions.
Put simply, if you use an "EZ" tax form and/or do not itemize deductions when
you file your taxes, then a vehicle donation may or may not allow you to
realize a tax savings. Again, please check with your accountant or tax
advisor.
Under the new IRS guidelines, when you donate any vehicle, you
may claim
the lesser of $500 or the "Fair Market Value", or if your
vehicle sells for more than $500 at the auction, then you may claim that
selling price (also known as the gross proceeds).
Here are two examples:
1)
Your donated vehicle has a "Fair Market Value" of more than
$500 and it sells at the auction for $400. Per the new guidelines, you may
claim $500 as a charitable contribution on your taxes.
2)
Your vehicle sells at the auction for $1,000. You may claim
$1,000 as a charitable contribution.
Please
know, Vehicle Management Services and our charities follow the IRS guidelines
exactly.
|
