Car donation, or the "sale" of a car to an
auctioneer or
junkyard (
breaker), affords the benefit of a quick sale without creepy strangers crawling up your front steps. Besides, charities benefit from the proceeds of sale to some degree or another. Far from painless, car donation involves
sketchy or
tardy purchasers.
Let me explain.
My 11 year old
steed broke its
pulleys and threw its
belts off. In
English, she had a
heart attack. Not willing to pour
$500 into a car already on
life support,
I left the car at my favorite
gas station and called my favorite
charity. The charity referred me to their preferred purchaser.
Call the charity and purchaser ahead to find out how much of the proceeds of sale go to charity.
Due to the
torture of the American
tax code, car donation involves a non-cash transaction yielding a deduction on the next
income tax return. The purchaser does not place a value on the car. Rather, the charity mails the seller a tax receipt. Based on
prudent judgement the seller enters the
book value, or trade value of the car, as the value on the return. In other words, my utterly dead car garners a book value of $2000 or so. I would get
zippo on the open market as its
a hurtin' cosmetically.
After fiscal year 2004, the purchasing company will determine the value of the car, significantly reducing the donation value of most cars. jmpz has reminded me that sellers may make deductions in excess of $5000 with proof of a certified
appraisal.
Be advised that the donation tow companies move with the
impetus of a
Soviet bread line. The company, headquarters in
California and far from
snowy Connecticut, referred me to a breaker
located almost 70 miles (110 km) from my home.
Efficient.
This
audit's
gonna be fun!