The IRS Deductions Blog

Posts Tagged ‘tax deduction vehicle donation’

Question: Donate a vehicle with tax deduction?

I would like to know how to donate a vehicle, and how to calculate the tax deduction (federal tax ? state tax). Who I should contact with?

I have an used car current market price is about $5000, and would like to sale or donate, but this car requires $1500 to repair if I want to sale it. I would like to know if make vehicle donation (sorry, I won’t fix the car) will be better for me.

Please don’t give me any answer like “Giving it to someone in need of a car will be a lot more charitible …” or “make you feel pretty good to help others …”, I am not in the level to give away few thousands, so please give me advice if you know anything about vehicle donation.
Thanks

Answer: If you donate the car to a 501(c)3 charity, you will get a notice from the charity telling you what they sold it for (they usually sell the donated vehicles). That amount will be your deduction if you itemize on your income taxes, , and you won’t know what it is until AFTER you’ve made the donation and they’ve sold the car. Say for example that they wholesale it for $2500 – they won’t mess with fixing it either, and won’t be able to get bluebook price for a car in need of major repairs. Wholesaling it, they’d probably be lucky to get $2500. Then your tax savings for federal taxes would be $2500 times your tax bracket. If you are in the 15% bracket that would be $375 – in a 25% bracket that would be $625 in tax savings.

MattD is wrong that you can take a deduction of the fair market value of the vehicle – that rule has changed. And since it needs the repairs, the fmv would be more like $3500 anyway, not $5000.

If you don’t already itemize, it’s likely that you wouldn’t get any deduction at all unless you are already very close to being able to itemize.

If you gave it to someone who needs a car, no matter how worthy that person was, there would be no tax deduction – donations to individuals aren’t deductible.

In most states, there would be no state tax savings since donations aren’t deductible most places.

Items on Amazon Right Now for Tax Deduction Vehicle Donation:

Support for UK museums: Public funding vs private giving

LONDON. Nicholas Serota, the Tate director who was at Frieze this week, and his peers are bracing themselves for drastic cuts in arts funding to be announced next week (on 20 October). Cuts of 25% to 30% are bound to have an impact on museums and…

Charity Navigator’s Tax Tips: Valuing Car Donations

Question: Is the 2009 tax deduction itemized or is it added to the standard deduction?

I purchased a new car and was informed that i could deduct the sales tax. Filed my return but my preparer said that the standard deduction was greater than the sales tax of the vehicle so it didnt make sense to itemized it. I thought this tax deduction was in addition to the standard deduction?

Answer: You won’t get many answers here as the category is Taxes > Canada and this is a US question.

Your preparer is wrong: follow the instructions for form 1040 line 40a and Schedule L.

Items on Amazon Right Now for Tax Deduction Vehicle:

Short Cuts for Your Small Busines $2.99 Written for the home-based business owner, not for the tax expert, the tax preparer or the tax attorney. Down to home advice from a licensed tax consultant in Oregon, where tax preparers and tax consultants are tested by the state to be able to work in this field. Answers such questions as should I buy or lease a car? What it takes to have an office in your home and what you can deduct from your i…

Careful analysis required for potential Regs. Sec. 1.752-7 liabilities.: An article from: The Tax Adviser $9.95 This digital document is an article from The Tax Adviser, published by American Institute of CPA’s on April 1, 2010. The length of the article is 1143 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available immediately after purchase. You can view it with any web browser.Citation DetailsTitle: Careful analysis required for po…

The AJCA’s domestic business provisions: the American Jobs Creation Act of 2004 (AJCA) is an expansive piece of legislation touching many types of … businesses.: An article from: The Tax Adviser $5.95 This digital document is an article from The Tax Adviser, published by American Institute of CPA’s on March 1, 2005. The length of the article is 6329 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.Citation DetailsTitle…

Does your business need tax help? Here’s what to avoid

Tax season is here, and deadlines are coming up a lot faster than most of us want to admit. If you’re stressing about income tax returns for your business, here are some helpful tips from the Associated Press.

TaxPlus – Tax Tips “Business Use of Vehicle”