Donating a car to charity (slightly OT)

For anyone who might be considering donating a used car to a charity (you know, Aunt Edna's slightly rusty, high mileage old Ford Escort or some other shitbox with essentially no parts you could use on a rod), the Law (as it regards to tax deductions) is changing as of January 1, 2005.

From a recent news article:

Tucked into the American Jobs Creation Act of 2004 is a crackdown on a feel-good practice that has fast become one of America's favorite tax deductions: donating an old car to charity. The bill says that as of Jan. 1, you can take a tax deduction only for what a car sells for at auction after you give it to a charity. Under the old law, you could deduct what you could document as "fair market value."

The result of the change to taxpayers: The amount you can deduct is going to plummet. For instance, a $1,500 clunker likely will sell at auction for about $500. You'll get a letter from the charity after it sells telling you the price. There goes your fat deduction.

The only exception is a car you value at $500 or less. You can take that deduction without waiting for the charity's price.

Charities are in an uproar. They fear that more Americans will just sell their cars rather than donate them. And that could cost the charities millions of dollars in donations.

Just thought a few HAMBers might be interested.

 

That has been an issue for a while. I dont know your side of this. It might hurt the charities initially, but people that want to help the charity will still donate, understanding the law. Most POS cars go to the junkyard for 100 bucks. If its better, it will sell for more.

If youre doing it for the write off, you'd be better off selling the car on the outside. You'd get more money in the end.
People were doing it for the wrong reason thats what caused this legislation. And the Gov thinks they are losing money too.
Is this really helping the charity? I think not. After its all said and done they get pennies on the dollar that the car sold for. Most use up alot for administration and advertising. Theres a site that you can check out all charities to see how much $$ goes to the cause. I dont know it now, but I will find it. Its surprising.

 

The other problem with donating cars to charities is that some charities turn right around and sell the cars to major corporations which then turn around a crush the cars for emissions credits. They cash the emissions credits in for the ability to send out more pollutants from their factories.

lesson being: do your research before donating.
dan