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Car
Donations and charitable donations |
The modern society, with its distinct
wealth-based classes has always prided itself with a strong
inclination to charity. From fundraising events to church donations,
charity has become a way for helping others but also a way to get
rid of some taxes. The tax benefit one gets from donating for
charity is roughly proportional to the value of the donation of
course. Lately, a new charity trend has formed, especially in
the United States and Western/Central Europe, that of the car
donation.
Car donations are practically give-aways of no
longer wanted or heavily used cars, to charity organizations,
individuals, companies or even institutions. In the United States,
the tax benefit from such car donations is among the highest you can
get from donations; hence the practice of giving away your old car
when you buy a new one has become very popular. Usually, the charity
organization you will donate your car too will evaluate it and set
an estimative value for it, which will determine this tax reduction.
For values that are under $500, the value of this reduction is set
by the donors own estimate of the cars value. Deductions for
donations over this amount are usually limited by the selling price
of the vehicle. The vehicles are either sold in auctions or through
direct marketing.
Although the car donation program is a
solid one in theory, it has been speculated that it could soon
become a tax shelter Since this could not be proven so far,
car donations have steadily grown to a number of almost 1 million
per year. This means that almost 1 million tax payers have reduced
their taxes with sums of up to $600-$700 million each year, only
through this type of car donation.
From a charity
organization point of view, the car donation program is one of the
best fields to work with. Actually, it has come to a point where
such non-profit organizations actually rely on car donations to keep
their charity events possible. Some of them have their own car lots
for donated cars and process them directly, while others rely on
ads, auto auction companies and so forth. What most charity
organization will do is take the donated car, sell it through the
auction company and then distribute the money to local charity
organizations, or further donates the money to a charity that the
donor of the car indicated.
It is important to understand
that the charity organizations selling donated cars don't get a
profit from it, they only take a small quota of the sum to cover up
their expenses. A trustworthy car donation charity organization will
bring other charities and institutions a lot of money each year,
genuinely helping them out. This said, it is expected that the car
donation phenomenon will constantly rise with each year, if the same
tax reduction laws are applied further on. Given the fact that it's
one of the most solid and popular types of donations today, it's
very unlikely that these reductions will be hindered by government
in any way.
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