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Japanese Garden of Monaco
Have you ever seen an authentic Japanese garden? Well, I had the chance of seeing the one in Monaco and was really impressed too. Wanna taste a little Japanese culture? Stepping on this ground is escaping from the real world into a fantasy land....
Organize Your Time
Most people want to start a home-based business to make more money to supplement their income. The issue though, is finding the time to make this happen.
Most people are busy, with family, an existing job, and the general feeling that there...
The Seller's Guide to the Buyer's Eye
The Seller’s Guide to the Buyers Eye A strong tendency towards a sellers market will continue until the baby boomers finish the cycle of buying and selling real estate, estimated to end in 20 years, according to the Senior Real Estate Association....
Unleash your creativity and think your way out of the box
The brain is a strange organ. It works in ways we don’t yet understand and manages to create everything we see. Working at odds with the rest of the body it performs best when we’re not consciously trying and it is exactly this right-hemisphere...
William Butler Yeats and Alchemy
There are adepts outside of what is called alchemy who have achieved great things in these areas and there are alchemists before Socrates and Aristotle, or Da Vinci and Newton; who all true experts know were alchemists. For any author or journalist...
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Donating Cars To Charity - New Tax Rules
On June 3, 2005, the IRS released guidance on charitable deductions for donated vehicles. The American Jobs Creation Act (AJCA) radically changed the amount of the deduction taxpayers can claim for their donated car.
Fair Market Value v. Actual Sales Price
When donating a car to charity, a taxpayer traditionally was allowed to deduct the fair market value. The new law changes this valuation to the actual sales price of the vehicle when sold by the charity. The taxpayer is also required to get written and timely acknowledgment from the charity in order to claim the deduction
The AJCA does provide some limited exceptions under which a donor may claim a fair market value deduction. If the charity makes a significant intervening use of a vehicle--such as regular use to deliver meals on wheels-- the donor may deduct the full fair market value. For example, driving a vehicle a total of 10,000 miles over a one-year period to deliver meals is a significant intervening use.
The AJCA also allows a donor to claim a fair market value deduction if the charity makes a material improvement to the vehicle. Under the guidance, a material improvement means major repairs that significantly increase the value of a vehicle, and not mere painting or cleaning.
Interestingly, the IRS has also added an exemption not included in the AJCA. On its own, the IRS has determined that taxpayers can claim a deduction for the fair market value of a donated vehicle if the charity gives or sells the vehicle at a significantly below-market price to a needy individual, as long as the transfer furthers the charitable purpose of helping a poor person in need of a means of transportation.
If you intend to assert one of these exemptions, how do you determine the fair market value? Generally, vehicle pricing guidelines and publications differentiate between trade-in, private-party, and dealer retail prices. The IRS consider the fair market value for vehicle donation purposes to be no higher than the private-party price.
The new provisions of the Americans Job Creation Act certainly make it less attractive to donate a car to charity. Using the exemptions, however, you can still create a sizeable deduction while helping others who are less fortunate.
About the Author
Richard Chapo is CEO of Business Tax Recovery - We recover overpaid business taxes for small businesses. 80% are due refunds of $5,000 to $10,000 on past tax filings. Contact us now to find out how much you are owed.
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