Car Donation - onlinecardonation.org Free vehicle towing
 

FOR THE LOVE OF MONEY: Say Goodbye  

*It's that time again to "Say Goodbye," (Chris Brown, 2006) to all of your unwanted clothes, tattered furniture and tired lava lamps. The 70s have come and gone again, two times now. This week, I'm sharing one of your questions regarding giving property to charity.

Dear Shannon : My husband has been after me to "spring clean," and has dubbed me the "Queen of Clutter". He has even tried to tell me that he would "Pay me to get rid of old clothes/furniture/junk". I asked him, "How is that possible?" He said that if we "donate to charities," we can get a slip to turn in for our taxes. Is there a limit on the dollar amount that you can claim for donations per year? From - Trying To Get Paid For the Mess That I Made, In the Beautiful State of Maryland

Dear Messy : Yes, you can take a charitable contribution for all your donations of non-cash items made to a 501(c)(3) organization; such as, clothes, appliances, household goods, toys, or furniture. You can only deduct the fair market value of the items, not what you originally paid for them.

How much can you deduct? The "Sky is the Limit?" (Notorius B.I.G., 1997) I'm afraid not. In most cases, the amount you can deduct for your contributions is limited to 50% of your adjusted gross income. However, in some cases, your contribution can be limited by as much as 20% or 30% of your adjusted gross income.

What happens if you're so charitable that you give more than your limit? All is not lost. You can take any unused contributions and carry them forward to your tax return next year (for up to 5 years).

Here are a few pointers to keep in mind about property donations:

Pointer 1: "The (Real) Shim Shady," (Eminem, 1999).
Your tax deduction must be based off the "real" fair market value of the property - not what you paid for it and not what your momma said she thinks it worth. How do you find the real fair market value? Thanks to the internet, there are several websites that have free valuation guides, such as The Salvation Army's website - www.satruck.com. You may be surprised at how little your used items are worth. Keep in mind, this is only one source for valuing your used items. Many tax preparation software programs also provide valuation guides that can result in much higher values. If you are giving away your $500 Burberry purse (because it's so last season), the fair market value is probably significantly higher than the $20 value listed on the Salvation Army's website. For truly expensive item, try searching eBay or a similar website. Print out a copy of your search and include that in your tax file as proof that your one-year old Burberry purse was worth more than $20.

Pointer 2: Form 8283 .
You will need to complete Form 8283, Non-Cash Charitable Contributions , for all non-cash donations over $500 and attach it your tax return. Fill out Section A of Form 8283 for non-cash contributions less than $5,000. For non-cash contributions over $5,000, fill out Section B of Form 8283 and don't forget to have the organization sign the form. You may also have to get a written appraisal for the value of the property being donated. If the organization sells, or otherwise disposes, of the property you donated within 2 years after the date of receipt of your contribution, the organization must then file Form 8282, Donee Information Return (within 125 days from the date of sale) and send a copy of this to you.

Pointer 3: Keep, Keepin On' (…You gotta keep keepin' on, D. Train 1982).
You must keep good records to prove or substantiate your property donations. Most charities have pre-printed forms that can serve as good receipts. You should keep a file for all your property donations and keep copies of these records for at least 3 years.

Pointer 4: Mercedes Boy, (Peebles, 1988).
In recent years, car donations have also become very popular. But beware: The IRS was so concerned about people taking large charitable contributions for cars that were basically worthless (sort of like those in Fred Sanford's junk yard) that the tax laws were changed to force more accurate valuations of car donations. Generally, you can find this dollar amount in any of the popular used car guides. But beware: If you take the highest value listed in the guide, be prepared to support it. Also, if your car needs major repairs, it will be difficult to prove that it is worth the highest fair market value listed in the used car guide.

As of January 1, 2005, if you donate car to a charity, and the value of the car is more than $500, your deduction depends on what happens to the car after the charity gets it. If the charity sells the car without making any improvements or changes to it ( i.e., they don't "pimp your ride"), your deduction is what the charity gets for your car (i.e., the gross sales proceeds). If the car is altered or improved by the charity (i.e., they turn your "hooptie" into a "whooptie woo"), your deduction is the new fair market value of the car. Also, you must get a receipt or thank you letter from the charity; attach it to your tax return. For more on car donations, see IRS Publication 4302, A Charity's Guide to Car Donations and IRS Publication 4303, A Donor's Guide to Car Donations.

Shannon King Nash is the author of the award-winning book entitled, "For the Love of Money: The 411 to Taking Control of Your Taxes and Building Your Net Worth." The above materials were taken from that book and may not be reproduced without the express written consent of the author. Shannon uses song lyrics and entertaining stories ripped from the headlines to teach readers how to manage their finances and taxes. Shannon is a CPA, Tax Attorney, and regular expert commentator on KJLH FM Radio in Los Angeles, and has appeared on national television. Contact the Nash Management Group at 818-986-2665 or visit www.nashgroup-usa.com .

By Shannon King Nash, Esq., CPA

Charity News
  Car donation
   » Car donations
   » Truck donations
   » Donate Boats
   » RV donations
   » Donate Motorcycle
   » Free Vacation Voucher
   » Free Car Towing
   » Why Donate with Us
   » Vehicle donation forms
  Charity donation Info
   » Contact / Donate
   » Donor Testimonials
   » Charity News Stories
   » Benefits of Donating
   » Real Estate with Causes
   » Collectibles With Causes
   » Computers with Causes
   » Timeshare Donations
   » With Causes Charity
  Vehicle Donation Info
   » Frequent Questions
   » IRS Tax Rules
   » Value of Your Car
   » Pick Up Information
   » Free Vacation Rules
   » Friends and Partners



Home | Why Choose Us | Vehicle Donation FAQs | Donate Vehicle | Free Vacation | Testimonials | Contact Us

© 2015 Online Car Donation Inc.- All rights reserved. Site Map