I'm an independent contractor in need of some tax write-offs. It was suggested to me by an accountant that I purchase a car for a few hundred dollars, and then sometime during the year, donate it to a specific charity (a local church) that offers a minimum $1,000 tax write-off for car donations.

 

Won't work if you don't cheat. Your deduction limit is your basis/cost. Don't use that accountant. Sounds like one the IRS would look at all the returns he/she files. Shame on them for bad advice.

 

I knew a guy that bought tax write-offs from a corporation that was selling them at 75% face value. These movie companies were given huge write-offs to move to a certain state after a certain storm caused a certain metropolis to flood. They would just sell the write-offs and use the cash.

 

I hear that they have a nice 8/12 room for people that do stuff like that.

 

Starting with your 2005 tax return, you will no longer be able to deduct the published fair market value of vehicles worth more than $500. Under the new rules, your deduction will be determined once your car is sold and the charity sends you a receipt indicating the exact amount your car garnered at auction

 

First of all, no, it doesn't work like that. Second of all, even if it did, it would likely cost you money, not save you money.