I'm thinking about doing this with my 4Runner for the tax benefit...but I think I screwed up. I think I would have had to donate it last year in order to claim it on the tax papers I will file this April. Is this correct?

Damn, I don't think I'm going to like the answer...

Does anyone have experience with donating a car for the tax deduction? Your advice would be greatly appreciated!

 

I say keep the war wagon in all its "clicking" glory. Seriously, 4-wheel slides in the 4runner the other day was fun(ny). Even if you replace it with a newer model, you'd just worry about it that much more.

Your 4 runner is perfect for hauling things, driving around the dingy, pot-hole infested Chicago streets and IL winters.

Screw the tax deduction...although I do believe that if you donate now, the deduction would go to your 2002 year taxes.

 

I've done it twice. It may be too late. The IRS has a number you can call to ask question like
this.

But here's why you should do it. You may deduct the book value from you fed AND state taxes.
When I determined my car's value, I took a VERY optimistic opinion of the car's condition. My '98
Z24 with 150K miles, which needed a new clutch, tires, breaks and struts, I considered to be in
excellent condition. That resulted in a $4500 deduction. My 85 Corvette was worth an $11000
deduction.

 

EL T, yea, that's the main reason I wanted to do it...for the "optimistic" value and not having to go through the hassle of selling it I need to find out if it's too late...but I have a feeling it is...

 

Greg,
The year you make the contribution is the return you take it on. So if you make it today, it will go on the 2002 return you file in 2003.
Two points to remember. You need to document your deduction. That means take pictures, keep records of condition, and how you arrived at a fair market value. If the FMV is over $5,000 you must get an appraisal!
Second, if you are in the 37% tax bracket (fed 28% state 9%) you will save $2,220 on a $6,000 car donated. If you sell it for any more than $2,220, you are ahead of the game. If it was not a business car, the proceeds probably are not taxable, if you bought it for more than the selling price.
Last, make sure it's a qualified charity you are giving it to.(I do tax returns for a living)

 

It is too late; you would have had to donate it by 12-31.

We donated our van a few years ago; the tow truck came to get it about 8:30 pm New Year's Eve, just under the wire.

As for the value of the deduction, remember that the value to you depends on your tax bracket. If your marginal tax rate (Federal and State combined) were 40%, a $4,500 deduction is worth $1,800 in tax savings.

 

Thanks guys (I know what you do, Morris!)

Oh well, the truck is worth a lot more than 5000 dollars...I think bluebook on it is about 11-12. And it's too late anyway. I knew the part about the tax bracket having the effect and selling it would be a better plan of attack. Oh well...it's too big a hit to justify...

I guess this kind of thing works better when the car is more of a beater...not that my 4Runner is a luxury vehicle! lol! But it runs great and most importantly, it's, as Luder alluded, is a B L A S T in the snow!


Thanks anyway!

 

[QUOTE]Originally posted by magician
[B]It is too late; you would have had to donate it by 12-31.

We donated our van a few years ago; the tow truck came to get it about 8:30 pm New Year's Eve, just under the wire.

As for the value of the deduction, remember that the value to you depends on your tax bracket.

 

"All true, but in my case my Z24 would have was really worth < $1000. The increase in my tax rebate was more than that."
I hope the next knock at your door isn't an IRS auditor.