Thanks to the new tax law, the IRS has taken the guesswork out of how to determine the value of your vehicle.
Beginning January 1, 2005 you may deduct the full price we receive for the sale of your vehicle. This greatly simplifies the process for you in several ways.
Under the new law, if your vehicle sells for more than $500 then the following applies:
- If your vehicle sells for more than $500 you’ll know exactly the amount you may deduct, eliminating guesswork. Thus you no longer have to research and come up with an estimate of the fair market value of the vehicle.
- The selling price of your vehicle becomes its fair market value and is what you can deduct on your tax return in most cases.
- This also eliminates the risk of you getting into trouble by overstating the value of your deduction on your tax return.
- This saves you both time and risk.
If you car sells for $500 or less at auction, you may deduct what you determine as the fair market value of your vehicle or the amount the vehicle sold for, whichever is less, and as long as that figure is under $500.00.
TWO FREQUENTLY ASKED QUESTIONS AT THE END OF THE YEAR:
QUESTION #1:
Will my donation be good for the year that I sent in the donation form, even if I don’t receive the receipt until the beginning of the New Year?
ANSWER: YES!
IRS Publication 4303, “A Donor’s Guide To Vehicle Donations” states:
“… the written acknowledgment must contain … the date of the contribution…”
The date of contribution is the date that we received the donation form. So it can even be on the 31st of December and will still be for that tax year.
The only exception might arise if you cancel the donation and then resubmit it later, or if the donation is canceled by us or the towing/auction facility due to reasons of inability to make pick up arrangements or lack of proper vehicle documentation, etc. Generally if you work with the towing/auction facility and assist in any problems that might arise then your donation will still be considered effective the date you filled out the donation form.
QUESTION #2:
If I submit the donation form on the last few days of the year and the towing/auction facility does not pick up the vehicle until the beginning of the New Year does the donation still count towards the current year, i.e. the year I submitted the donation form online?
ANSWER: YES!, as stated above.
