Deduction junction
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Published: May 25, 2005
f you've contemplated donating your no-longer college kid's Honda or tIhat Toyota sitting on blocks in the backyard to a charity, the Good News Garage has a deal for you.
Non-profits like the Good News Garage that rehabilitate cars and sell them at low cost to low-income people can now accept cars in two different ways.
OK, we know tax laws make your eyes glaze over but this is for a good cause.
"Since Jan. 1, 2005, there's been a big change in the tax law. We want people to know about this," says Carmen George, the lady charged with getting out the word on the Good News Garage. George says most charities that accept car donations sell the cars at auction. Now, if a donated car is used by a family in need, a donor can deduct the fair market value when he or she files – which makes it a better deal for everyone.
If a donated vehicle is used directly by a low-income family, the donor can deduct the vehicle's "fair market value" or the value of the car if it had been sold on the open market, she says. The fair market value is almost always higher than the price the car gets at auction, she notes.
Since Good News Garage opened in July 1996, about 3,500 vehicles have been donated and more than 1,200 cars have been given to qualified low-income people. The majority of recipients are young families and single mothers.
Who says tax laws are all bad? Here's a chance to help someone and get rid of that car that still runs but you don't want anymore.
For more information, visit www.goodnewsgarage.org for a link to sites that help you figure out the value of your car, or call 877-GIVE-AUTO.
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