2004 Year End Tax Move: Donating A Car To Charity

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<b>Car & Boat Donations To Charities</b>: The IRS caught on that people
were giving cars and boats to charities and claiming inflated
deductions when the cars and boats were selling for much less. Many
donated vehicles are sold at auction for prices far less than what
donors were claiming on their tax returns. While you can still claim
the fair market value of a car or boat you donate to a charity this
year, starting next year you'll only be able to deduct the amount that
the charity actually sells the vehicle for no mater what the fair
market price indicates. If the fair market for your car is $2000
according to published price books, but the charity sells the car for
$800, you are only entitled to an $800 deduction starting January
first.

If you won't be able to donate your vehicle before December 31, one way
to get around this new law is to donate your vehicle to a charity that
will use it as part of their operation or give it to someone that will
use it. If the car is not sold, then you'll still be able to deduct the
fair market value on your taxes even after January 1.
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