Rules To Follow When Giving To A Vehicle Donation Milwaukee Charity

Giving to charity seems like something that is very easy to do. You give the charity what you no longer want and through which you wish to support them, and that is all there is to it. In reality, however, things are a little bit more complicated than that. The reason for that is that if you donate to a 501(c)3 registered charity, you can deduct the value of your donation from your taxable income and decrease your taxes. And if you plan to make a vehicle donation Milwaukee charities will quickly tell you that determining that value can be a little bit more complicated. What are the rules to follow when giving to a vehicle donation Milwaukee charity? Let's take a look.

The Rules to Follow When Giving to a Vehicle Donation Milwaukee Charity

The rules are not overly complicated but it is still important to understand them. The most important thing to remember is that you can only deduct the value of your donated vehicle from your taxable income if the charity you gave to is 501(c)3 registered. If that is the case:

1. If the vehicle sells for $500 or less, you can deduct the fair market value (FMV) up to $600. For instance, if your vehicle's FMV is $800 but it sells for $300, you will be allowed to deduct $500. Also, you will need to complete Section A of Form 8283.
2. If the vehicle sells for between $501 and $5,000, you can deduct the amount it sold for, regardless of the FMV. You also have to complete Section A of Form 8283.
3. If the vehicle sells for more than $5,001, you can deduct the amount it sold for, regardless of the FMV, but you will also require an independent valuation and you will have to complete Section B of Form 8283.

Some More Rules

One other thing to remember is that if the charity made substantial improvements to the vehicle that increased its value, you will only be allowed to deduct the value at the point of donation. Similarly, if the charity does not sell the vehicle at auction but rather gives it to a service user or keeps it, you can only deduct the value at the point of donation.