Sunday, April 28, 2013

I really donate a car and get a tax refund ?



Q : I really donate a car and get a tax refund ?
I found a site that will give me the blue book for my car ....
It is good to be true?

A : You must be very careful. Before tax season 2005 alone, the IRS has gotten a lot more difficult with donated cars. Now, you must have a tax identification number of the organization or the exact name of the company that takes your car, if the fair market value of $ 500 or more. It's either going to his social security number or, in the case of agencies and charities, the employer identification number {EIN}. These notes:

Reduction of more than $ 500. If you are eligible to donate a car to a qualified and you ask for a discount of over $ 500 organization, you can deduct the lesser of:
The gross proceeds from the sale of the car by the organization, or

The fair market value of the car at the time of contribution. If the fair market value of the car more than the cost or other basis, you may have to reduce the fair market value of the knowledge of the amount of the rebate, as described in part to give property that has increased in value at a later date.


Form 1098-C. You must attach to your return a copy of Form 1098-C, Contributions of motor vehicles, boats and aircraft (or other statement containing the same information Model 1098-C) received from the organization. The Model 1098-C (or other statement) will show gross proceeds from the sale of the car.

If you do not attach Form 1098-C (or other statement), you can not deduct your contribution. You should get a 1098-C (or other statement) form within 30 days of the sale of the car. But if one or two exceptions (described below) applies, you should get a 1098-C (or other statement) form within 30 days of your donation.

Exceptions. There are two exceptions to the rules mentioned only for deductions of more than $ 500.

One exception - the car or enhanced through the organization. If the organization is qualified makes great use of the intervention or substantially improved on the car before the transfer, and you ask for a discount of over $ 500, and you can generally deduct the fair market value of the car at the time of contribution. But if the fair market value of the car more than the cost or other basis, you may need to reduce the fair market value for the amount of the rebate, as described in part to give property that has increased in value, at a later date. Form 1098-C (or other statement) will show whether this exception applies.

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