M. B. wrote:

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Your question started a debate and research here. It seems
that legislation that was signed into law in October 2004
(the American Jobs Creation Act of 2004) has a part in it,
"Abusive vehicle charitable deductions: The charitable
deductions for a post-2004 contribution of a motor vehicle,
boat or airplane resold by a charity is limited to the gross
proceeds received by the charity, instead of the full 'Blue
Book' value. There is an exception if the charity made
significant use of the item in conducting its activities or
material improvements to it before the sale." - This article
was faxed to my office. It was from "The Tax Adviser"
January 2005 edition, column 3, second paragraph.

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M. B. wrote:

- quote -

What you should have gotten is a RANGE of values. Overall
condition and appearance affect where in the range your
car's value belongs.

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Form 8382, carried to Schedule A.

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One cannot depreciate a contribution.

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Newspaper advertisements for the same make and model
(although those are just the "asking" prices).

- quote -

No, it doesn't.

- quote -

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M. B. wrote:

- quote -

Two new publications were published by the IRS specifically
regarding deduction for automobile donations, publications
4302 and 4303. The IRS had gotten very concerned at the
extreme abuse many individuals were involved in adjusting
the donated price of their automobile. Kelley's Blue Book
is now considered a place to start, however far from the
actual value of your automobile. We discussed this
specifically at the last tax seminar I attended. It seems,
in summary, that you may have to amend your return in the
future depending on the circumstances of where you donated
your car to, what it was sold for, etc.

Greg

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M. B. wrote:

- quote -

what you may deduct is FMV, fair market value, and we use
the Kelley blue book value as a starting point for this
calculation. Example, if it were in average condition at
that 2635 valuation except for needing $235 worth of rust
repairs, then FMV would be 2,400$.

My 1993 Saturn station wagon had a blue book value of 2,300
(low mileage), but the headliner had become unglued, so
the whole thing needed replacing. Can't just re glue it,
have to use new material, so called one of my clients and he
did the job for 110$. Before the repair FMV of my Saturn
was 2,190$; afterwards, 2300. See how it works?

- quote -

It's an itemized deduction, so get instructions for schedule
a. AMD make sure you have a receipt from the donee
organization. AND be sure the donee is qualified.

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One year only.

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Save that print out and get quote for the rust repair to
nail down your proper deduction.

Oh; want to buy a Saturn station wagon?

Happy New ChEAr$,
Harlan Lunsford, EA n LA

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"M. B." wrote:

- quote -

I think it matters. I've seen car lots catering to low
income buyers who don't stock those.

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I've read that dealers now use a private subscription
service, Grey Book or something. The online calculators are
now free to help the industry draw in car buyers. According
to these "consumer" appraisal sites, my 2001 Tacoma truck
now retails for between 95-105% of what I paid new -- from a
Toyota dealer who owns a Learjet. The idea must be to
create the illusion of a really good deal for used car
buyers. Think of what they can now do in the sales office to
a naive, a non-internet user with an impressive computer
screen. Another reason why they had to kill this donation
method?

You should use "private sale" value, not used-car lot
retail. If you pulled down the highest of the sites,
private sale, less-than-avg condition as seems correct here,
then IRS has nothing left to challenge if they felt so
inclined for this small deduction. Save the printout, the
highest one; toss the others. IRS can't recover any of
them later on their computer.

Fred F.

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"M. B." <REMOVETHESPAMmystic02[at]verizon.net> writes:

- quote -

You get to deduct the fair market value of *your* actual
car. Not a hypothetical Blue Book car. In other words,
your deduction is what you could sell *your* car for in an
arm's-length transaction. So if you could only sell your
car for $1000, you can only deduct $1000, regardless of what
the BB says.

Now, the BB value can be taken as partial evidence towards
the FMV, but you need to adjust the BB value for the actual
condition, milage, etc. of your car to come up with
something reasonable. It would also be a good idea to check
the classifieds and see what other people are selling your
make, model, and year of car for.

- quote -

As a non-cash charitable contribution, on Schedule A.

Which means that if you don't itemize your deductions, you
get no tax benefit from the donation.

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This year or never.

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Classified ads. Other used car guides. And make sure to
honestly adjust for the condition of your car.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

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On December 4, I donated my used old car which was in decent
physcial condition but fully running. I pulled up the
"current value" of the car on Kelley Blue Book (the most
used site by dealers and others), and it gave me a "todays
retail value" on this car as $2,635.

So, since I am allowed to deduct the full amount of the car
donated:

1) Would I use this as number as value for the car? The car
is slighty beatup and there is some rust. Or it doesn't
matter as long as it was/is in running condition?

2) Where do I specify this number on my tax return?

3) This sum needs to be deducted in one year, or can it be
depreciated?

4) I made a "print-out" of todays quote from the website.
In case I get called in for an audit, can I get any other
proof from other sources as to the car's value as of the end
of this year?

If this makes any difference, I am in the state of New York.

Thanks for the help and suggestions!

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