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Ads
from vehicle donation programs are appearing everywhere,
with greater frequency, on the Internet, TV, radio and
in print. Car donation tips abound, telling taxpayers
how to make car donations for charity, choosing car
donation organizations, and more. As donors become more
aware of this option, controversy is also growing. And
once with the controversy, car donation scams have become
more and more prevalent.
Many
of car donation programs are run by for-profit used
car dealer/fundraisers, which keep the largest share
of the proceeds from your auto donation, the charity
ending up with a measly 10% or 15%.
More
than this, even some well-known and respected charities
are not licensed to legally process your auto donation
in some states.
And
according to the IRS, unless you donate your car directly
to the charity and place the name of the charity on
the title, your donation might not even be tax-deductible.
As
in all things, it is important for a consumer (or, in
this case, a donor) to become educated and informed
so that he or she may make a wise choice as to whether
or not, and to which charity, to donate a car.
Here
are a few steps that you can take to be sure that your
donation arrives where it is intended to be and not
in a scammer's possession.
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Verify that the charity is tax-exempt and authorized
to solicit contributions.
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Ask how the vehicle will be used. Will it be fixed up
and given to the poor? Will it be resold, and if so
what share of the proceeds will the charity receive?
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Itemize deductions, in order to benefit from a vehicle
donation. But first, decide whether total itemized deductions
are greater than the standard deduction.
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Deduct only the fair market value of the vehicle, taking
into account its condition. This may differ substantially
from the value listed in used-car guides.
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Document the charitable contribution deduction. IRS
Publication 526 (available at www.irs.gov) explains
the types of receipts taxpayers must obtain, and the
forms they must file.
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Make sure the vehicle's title is transferred to the
charity and keep a copy of the transfer.
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