For many people in the city of the Golden Gate, donating their trusty set of wheels presents an excellent opportunity for tax deductions. Nevertheless, times change, and it’s important for you to realize that the rules for how much you can get have changed as well. Below is some information on car donations in San Francisco that you should look into before donating.
Because some taxpayers got greedy, claiming much more than their old autos were worth, lawmakers tightened the rules on how much you can write off for a vehicle donation. Now the precise tax break depends on the donor’s claimed value of the gift and how the charity uses the vehicle. – Fox Business
In the past, your tax deductions will be equal to the car’s fair market value; that is, the cost that you get after consulting with dependable auto valuation services like Edmunds and Kelley Blue Book. This has only led to a lot of donors giving away clunkers and wrecks that had extremely low actual value than market value. These legislation changes have led to many vehicle donors getting disappointed that they aren’t exactly getting what they expected.
To simplify things, the Fox Business suggests that donors should consider a $500 threshold for all vehicle donations including just about everything from boats, cars, to even planes. It is only when the fair market value (once again, from reputable services like those mentioned above) comes into play that things start to become complicated.
It’s important for you to keep track of your charity of choice; if they auction off your car for a price that’s lower than your estimated FMV, your deductions will apply based on the former cost. To make this fair on your part, take note that your recipient charity must give you a substantiation of your donation within thirty days after you turn your car over.
Before you donate a car San Francisco charities might recommend that you look for an intermediary service for help with tax deductions. Companies like Harold’s Car Donation Service will work with the charity to help assure you that you get a dependable IRS-approved tax deduction rate.
(Info from Tax Benefits of Donating a Vehicle, Fox Business, June 28, 2013)