Comments on: 5 Reasons You Should Donate Your Car

By: saladdin

saladdin — Sun, 07 Sep 2008 02:40:02 +0000

Just add me to the list of ones refused by a charity.

saladdin

By: Neer Patel

Neer Patel — Thu, 04 Sep 2008 15:28:09 +0000

When I was looking for a new car, I was trying to figure out my option on what to do with my old car. Here is some math I did. It may be a bit confusing, so send me a msg if you need me to clear anything up.
(all income taxes below are based on the 25% bracket & sales tax at 8.25%)

My Honda Ridgeline cost me $34,000 plus $2,805 in taxes (drive out at $36,805)

If I traded in my car, I would have gotten $4,000 from the dealer for the car & paid $330 less in sales tax. Making my drive out $32,475($30,000 + $2,475).
(The amount of your trade in lowers the sale price of the car before taxes)

If I donated the car, and took the tax deduction. I would have gotten $8,000 in deduction.(They valued my cars high then the dealer did)
So that would have been $2,000 in deduction.

I live in Texas, so I can deduct my sales tax(if you itemize).

if I traded in I would have paid $31,857 ($34,000 – $4,000 + $2,475 – 618)
If I donated I would have paid $34,104 ($34,000 + $2,805 – $2,000 – 701)

The difference was $2,247. So I donated it. It was well worth, because I learned more about taxes (it was the first time I had itemized). Plus it helped the organization.

By: andy

andy — Thu, 04 Sep 2008 15:25:45 +0000

About 3 years ago I needed to unload a car really quick. It was a ‘93 Plymouth Acclaim with almost 130K on it. It wasn’t worth much more than $1000, so the tax deduction wasn’t a big deal for me, and selling was going to be far too much trouble.

I called the National Kidney Foundation, and they refused me! Something about the car not being worth their time/effort.

I called the Salvation Army, and I couldn’t turn it over fast enough! He wanted to send someone over to pick it up that afternoon, and I had to push him off to the following day. Got my receipt in the mail a few days later.

I don’t know if they fixed up the car or sold it for scrap, but it solved a problem for me and apparently it was useful in some way for the SA as well.

By: Mr. ToughMoneyLove

Mr. ToughMoneyLove — Thu, 04 Sep 2008 15:09:54 +0000

Not to rain on the tax deduction parade, but most charities that receive donated cars re-sell them for the cash. This creates problems for the donor because of new IRS rules introduced in 2005. If the vehicle is worth more than $500 and if the charity re-sells it, the deduction is limited to the amount received in the re-sale by the charity. That could be a substantially different number than FMV.

By: The Digerati Life

The Digerati Life — Thu, 04 Sep 2008 14:18:07 +0000

Haven’t yet ever donated a car. Our modis operandi has always been to sell our car in Craigslist while it’s still in good shape. But you have given me something to think about! Great post!