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- Do ask if the charity handles all aspects of the donation. Some charities hire for-profit companies to handle donations. If this is the case, ask how the money is split between your charity and the for-profit company. Ask whether the for-profit company is your charity's authorized agent.
- Do try to accurately predict the fair market value of your car. According to the IRS, you can deduct the fair market value of your car, which is defined as the price at which property would change hands between a willing buyer and a willing seller, neither having to buy or sell, and both having reasonable knowledge of all the relevant facts. Commercially published "blue books" provide average dealer prices and give estimates for adjusting the price because of unusual wear, mileage, or physical condition. Such guides are not "official" but are often a good place to start. If they do not list a sales price for a car that is the same make, model, and year, sold in the same area, and in the same condition, then some other reasonable method must be used.
- Do have your car appraised by a qualified professional appraiser if it is worth more than $5000.
- Do maintain a personal record of your donation. Items that should be included in this personal record include:
(1) The name and address of the organization to which you contributed. (2) The date and location of the contribution (3) A reasonably detailed description of the donated car or a photograph of the car. (4) The fair market value of the car at the time of the contribution and how that value was calculated. If it was appraised, keep a signed copy of the appraisal. (5) Any terms or conditions attached to the car donation. (6) How you obtained the car (by purchase, gift, inheritance, etc.) and the date you obtained the car. (7) A copy of your title, registration and any receipts you are given by the tow company or charity.
- Do obtain a written acknowledgment from the charity or its authorized agent. The acknowledgment must contain the name of the charitable organization, the date and location of the charitable contribution, and a reasonably detailed description of the donated car. If the car is worth more than $250, the acknowledgment must also state whether the charity gave you any goods or services in return for your contribution as well as a description and estimate of the value of the goods and services you received. This acknowledgment must be received before you file your income tax returns.
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