Tax Deduction Salvation Army
March 18th, 2010
Question: Possible Tax Deduction or Not?
I want to donate my old car to the Salvation Army.
Will I be able to claim it as a deduction if I do not own my home?
I have to do the “straight file”, does that mean I can not claim the car as a donation?
1040 EZ= Straight File
Answer: Since you cannot itemize deductions, but are filling out a 1040EZ, you should sell the car. It will be easier: there won’t be so many restrictions. Also, the donee often receives very little after fixing up, painting the car for use for the poor or for resale. You should sell the car as it will go towards payng cash for a different vehicle. If you allow a dealership to set up payments, you will wind up paying on “time payments” with every car you buy. You will be in the hole for the rest of your life, or until the environmentalist rip up most of the roads and force us to use public transportation.
Donee. E.g: Salvation Army TIN is 58-0660607.
The IRS is now a lot stricter in their requirements with regard to giving away automobiles, vessels, aircraft, computers and certain investments than ever before. The IRS has a new Form called the 1098-C that specifically deals with the charitable contribution of your vehicle. Do not donate a vehicle, boat or airplane UNLESS the donee provides you with this 1098-C or a written acknowledgement containing all the information required by the 1098-C. If the donee sells the vehicle, the donee MUST fill in Line 4C or write down when he sold the vehicle, sign it, and or course put his Taxpayer Identification Number. If the donee does not, you will only be able to deduct the LESSER of the fair market value of the vehicle or what the vehicle was sold for by the charitable organization.
For donations exceeding $500.00, the donee must supply a written statement acknowledging the donation
Even if do not itemize, you still MUST attach the Form 1098-C. For these non-cash donations, the donor may not claim a deduction in excess of what the donor sold the mode of transportation for.
If the vehicle had a value of between $250.00 and $500.00, the donee must provide a statement of any cash received, a description of the property donated and whether any goods or services were rendered in exchange for the donation. If the vehicle was sold for significantly below fair market value, you may be able to deduct up to $500.00. If the vehicle was sold for gross proceeds which equaled or exceeded FMV, you may only deduct the FMV [1098-C or written acknowledgement by donee].
If the charitable organization did intervening substantial use or upgrade, there should be a written statement of such.
If the charitable organization intends to sell the vehicle for significantly under FMV, the charitable organization must type up a statement detailing such within thirty days of receiving the donation along with a certification that the sale is a direct furtherance of the charitable organization’s purpose of relieving the poor and needy or the underprivileged whom are in need of a means of transportation.
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