The IRS has taken methods to take the guesswork and confusion linked with auto donation tax deduction with a new law. When January 1, 2005 rolled about, you had been in a position to deduct the complete value that the charity of your decision receives for the sale of your auto.
Numerous instances men and women had been hesitant to donate their auto to a charity that so desperately demands the assist basically since of the hassle involved in getting the fair marketplace worth of their automobile if the automobile was worth extra than $500. Normally the donator had to appear up the auto they had been hunting to donate in the infamous “Blue Book” to get an estimate for the fair marketplace worth in order to get the complete added benefits of a auto donation tax deduction.
With the new law if your auto sells for extra than $500 at the auction exactly where your auto will be sold, the charity is obligated to send you a receipt that has your name and automobile identification quantity or VIN of your auto. They will have to also state that your donation was “arms length” which implies that the particular person or organization you donated your auto to is not associated to you in any way whether or not it is your loved ones or a company associate. They will have to also include things like the promoting value of your auto. This is the fair marketplace worth value. It is that easy. No extra browsing by way of records and books attempting to come across the suitable numbers to make your auto donation tax deduction.
If the auto you donate is sold for significantly less than $500, it is up to you to figure out the fair marketplace worth as extended as the figure is beneath $500. The tax receipt that the charity is needed to send you will be significantly less detailed and will merely acknowledge your donation. The information and facts integrated on the tax receipt will be your name, the date of the donation and a short description of the automobile.
The simplification of the laws regarding auto donation tax deduction is great news for charities. As extra men and women recognize the great their auto donation can do for other people and the ease in which you can itemize your auto donation tax deduction, they will be eager to assist. Spread the word so that extra men and women donate extra vehicles to assist even extra men and women.