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Home / Services / Calculators / Newsletter / Archives Donating Your Car You have probably heard charities asking you to donate your old car to charity. The charity will sometimes state that "you can save more in taxes than the car could be sold for." This is nonsense! Any charitable donation is limited to the fair market value of the item donated. A donation of $250 or more must be substantiated by a contemporaneous acknowledgement from the charity describing the item donated. A donor may use an established used car pricing guide to determine fair market value of a single donated car if the guide lists the sale price for the car that is the same make, model, year and sold in the same condition as the donated car. If the market value is $5,000 or more, you need a written appraisal from a certified appraiser. Since you can only deduct the fair market value of the car, and the tax rate is less that 39%, it is impossible to save more in taxes than you could sell the car for. If you have a car that you do not want anymore and you wish to help your favorite charity, then by all means go ahead and donate your car. Be sure to keep all of the proper papers. (March, 2003 Newsletter)
James E. Newland, CPA 939 Center Road Eastlake, Ohio 44095 440-951-9799 |
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