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Donate Car Tax Deduction Definition

Source:- Google.com.pk

TWO FREQUENTLY ASKED QUESTIONS AT THE END OF THE YEAR:
QUESTION #1:
Will my donation be good for the year that I sent in the donation form, even if I don’t receive the receipt until the beginning of the New Year?
ANSWER: YES!
IRS Publication 4303, “A Donor’s Guide To Vehicle Donations” states:
“… the written acknowledgment must contain … the date of the contribution…”
The date of contribution is the date that we received the donation form. So it can even be on the 31st of December and will still be for that tax year.
The only exception might arise if you cancel the donation and then resubmit it later, or if the donation is canceled by us or the towing/auction facility due to reasons of inability to make pick up arrangements or lack of proper vehicle documentation, etc. Generally if you work with the towing/auction facility and assist in any problems that might arise then your donation will still be considered effective the date you filled out the donation form.
QUESTION #2:
If I submit the donation form on the last few days of the year and the towing/auction facility does not pick up the vehicle until the beginning of the New Year does the donation still count towards the current year, i.e. the year I submitted the donation form online?
1. Is a 50 % deductibility limitation a good thing or a bad thing?
Actually it is a good thing. The highest deductibility limitation that exists for a noncash charitable contribution is 50%. So if a charity has a 50% deductibility limitation then that is as good as it gets.
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2. What is a 50% deductibility limitation?
Here is the answer as given in IRS Publication 526:
"The 50% limit applies to the total of all charitable contributions you make during the year. This means that your deduction for charitable contributions cannot be more than 50% of your adjusted gross income for the year."
So if your adjusted gross income is $20,000 then you can only deduct 50% of that ($10,000) for charitable contributions in one year. If you have more than that in a given year you can carry it over to the next year.
Here are some excerpts from IRS Publication 526:
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3. "Contributions You Can Deduct"
Generally, you can deduct your contributions of money or property that you make to, or for the use of, a qualified organization. A gift or contribution is “for the use of” a qualified organization when it is held in a legally enforceable trust for the qualified organization or in a similar legal arrangement.
"The contributions must be made to a qualified organization and not set aside for use by a specific person.
"If you give property to a qualified organization, you generally can deduct the fair market value of the property at the time of the contribution."
"Your deduction for charitable contributions is generally limited to 50% of your adjusted gross income, but in some cases 20% 30% limits may apply."
"The total of your charitable contributions deduction and certain other itemized deductions may be limited. See the instructions for Form 1040 for more information."
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4. "Limits on Deductions"
If your total contributions for the year are 20% or less of your adjusted gross income, you do not need to read this section. The limits discussed here do not apply to you.
"The amount of your deduction may be limited to either 20%, 30%, or 50% of your adjusted gross income, depending on the type of property you give and the type of organization you give it to. These limits are described below.
"If your contributions are more than any of the limits that apply, see Carryovers under How To Figure Your Deduction When Limits Apply, later.
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5. "Out-of-pocket expenses"
Amounts you spend performing services for a charitable organization, which qualify as charitable contributions, are subject to the limit of the organization. For example, the 50% limit applies to amounts you spend on behalf of a church, a 50% limit organization. These amounts are considered a contribution to a qualified organization."
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6. 50% Limit
"The 50% limit applies to the total of all charitable contributions you make during the year. This means that your deduction for charitable contributions cannot be more than 50% of your adjusted gross income for the year.
"Only limit for 50% organizations. The 50% limit is the only limit that applies to gifts to organizations listed below under 50% Limit Organizations. But there is one exception.
"Exception. The 30% limit also applies to these gifts if they are gifts of capital gain property for which you figure your deduction using fair market value without reduction for appreciation. (See 30% Limit later.)