Cashing In On A Charitable Donation

ANCHOR LEAD
THINKING ABOUT DONATING YOUR CAR TO CHARITY? BETTER PUT THE PEDAL TO THE METAL IF YOU WANT THE BEST TAX DEDUCTION. THE I-R-S IS CHANGING THE RULES ABOUT THIS POPULAR WRITE-OFF AT THE END OF THE YEAR. SCOTT HANSON GIVES YOU A HEADS UP...

TRACK ONE Length: :06
WHEN LISA FOUND OUT SHE WAS HAVING TWINS, SHE KNEW THE LITTLE RED CONVERTIBLE SHE LOVED WASN'T GOING TO BE BIG ENOUGH.

SOT
KEY @: :07 Lisa, Donated Her Car
"...it just wasn't practical for our lifestyle anymore."

TRACK TWO Length: :04
INSTEAD OF SELLING HER CAR, SHE DECIDED TO DONATE IT TO CHARITY.

SOT
KEY @: :14 Lisa, Donated Her Car
"We are going to deduct it off our taxes."

TRACK THREE Length: :08
LISA IS LUCKY SHE MADE HER DONATION BEFORE THE END OF THIS YEAR. THAT'S BECAUSE ON JANUARY 1ST... THE OLD RULES FOR DONATING YOUR CAR HIT THE HIGHWAY.

SOT
KEY @: :24 Donna LeValley, Tax Expert
"The I-R-S is sort of scrutinizing the program..."

TRACK FOUR Length: :08
DONNA LEVALLEY OF JK LASSER'S TAX GUIDE SAYS THE CAR DONATION PROGRAM HAS BEEN POPULAR WITH TAX PAYERS BECAUSE THERE'S A LITTLE LOOPHOLE.

SOT
KEY @: :34 Donna LeValley, Tax Expert
"They could get rid of an older car and get a deduction for the full market value."

TRACK FIVE Length: :05
A VALUE THAT TAXPAYERS COULD SIMPLY LOOK UP IN THE KELLEY
BLUE BOOK AND PLACE ON THEIR TAX RETURN.

SOT
KEY @: :43 Donna LeValley, Tax Expert
"Unfortunately, those values are based on a car of a certain condition, certain mileage, etc., and so some of the cars weren't quite up to snuff."

TRACK SIX Length: :12
FOR EXAMPLE, A CHARITY MAY ONLY BE ABLE TO SELL YOUR 10-YEAR OLD CLUNKER FOR $750, WHILE THE KELLEY BLUE BOOK VALUES THAT MODEL AT $1500. THIS YEAR YOU'LL GET A FAT TAX DEDUCTION. BUT...

SOT
KEY @: 1:06 Donna LeValley, Tax Expert
"Starting in 2005, if you make a car donation... they're going to want to know what the charity does with the car..."

TRACK SEVEN Length: :22
THE CHARITY MAY SELL IT FOR PARTS, REFURBISH IT AND GIVE IT TO THE NEEDY, SELL IT TO A DEALER, OR EVEN AUCTION IT OFF.
BUT WHEN THE DEAL IS DONE, THE CHARITY MUST TELL YOU WHAT THE CAR ACTUALLY SOLD FOR, AND YOU ARE LIMITED TO THAT AMOUNT AS A DEDUCTION. LISA IS HAPPY SHE DONATED HER CONVERTIBLE WHEN SHE DID. HER NEW SUV HAS PLENTY OF ROOM FOR THE TWINS, AND HER OLD CAR MADE LIFE EASIER FOR A SINGLE MOM...

SOT
KEY @: 1:30 Lisa, Donated Her Car
"...incredible to see her driving it every time we see it on the road."

STAND-UP CLOSE 1:33
AND NO MATTER WHEN YOU DONATE YOUR CAR, TAX EXPERTS OFFER THIS ADVICE...TAKE PLENTY OF PICTURES INSIDE AND OUT, AND KEEP ANY OLD SERVICE RECORDS YOU HAVE. THAT WILL BOLSTER YOUR DEDUCTION IF THE I-R-S EVER QUESTIONS IT. FOR HEADS UP, I'M SCOTT HANSON.

ANCHOR TAG
IT IS ALSO IMPORTANT TO MAKE SURE THE CHARITY YOU ARE DONATING TO IS LEGIT. HOW? CHECK WITH THE "YOUR STATE" CHARITY REGISTER BEFORE MAKING ANY MOVES.

SOURCES

Donna LeValley
Contributing Editor, JK Lasser's Tax Guide
201-748-6882

Donna LeValley is a contributing editor for JK Lasser's Tax Guide. JK Lasser offers easy-to-follow, expert advice and guidance on planning and filing your taxes.