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The American Jobs Creation Act providing tax cuts to help business was funded in part by increasing taxes to those people. Approximately $2. 4 billion was realized through prohibitions on donors to receive the fair market value for car or truck donations. Deductions are now limited to the gross Best African Charity to Donate to great deals price or maximum fair market value of $500. Due to the fact most donated vehicles are sold at dealer auctions, this has resulted in dramatic decreases in vehicle donations, especially better value cars.
WHEN CAN YOU CLAIM FULL “FAIR MARKET” VALUE?
There are still a few exceptions that allow donors to claim fair market value for their charity car donation. The RATES regulations for these restrictions are limited and they warn this some car donations taken under these exceptions is definitely not allowed. According to the IRS, donors may claim a discount for the full fair market value only if:
o The charity defines a significant intervening use of the vehicle, such as delivering “meals with wheels”.
o The charity makes a material improvement to the auto, i. e., major repairs that significantly increase it has the value.
o The charity gives the donated vehicle or stocks it to a needy individual in need of transportation at a fee significantly below market price.
DETERMINING THE FAIR MARKET VALUE:
The actual IRS accepts the Vehicle Donation Industry recommendation that the right fair market value of a donated vehicle is the private gathering sale value. This value is determined by the donor and are found in guides such as Kelley Blue Book. The actual condition of the vehicle must always be taken into consideration in determining the value.
MEDICAL HISTORY REQUIREMENTS UNDER THE NEW LAW:
o The charity must supply donor a written acknowledgment (a tax receipt as well as Form 1098C) within 30 days of selling or placing the vehicle in use. it should state the amount the vehicle sold to get, if over $500, or that it is eligible for the full considerable market value deduction due to the ‘intervening use’.