You might have come across such ads where the slogan chanted repeatedly is “Donate auto and enjoy a tax break”. Well, this is true technically. Attributing to this reason, past few years have witnessed an increase in the number of auto donation which is a two way process i.e. it not only helps the donor but also others for whom the used vehicle is donated.
Charity Or Business?
Although charity remains the prime motive of car donation, yet gauging its pros and cons, it has become more or less a massive business. In 2000 alone, almost three-fourth people of a million, opted for car donation and considerably decreased their taxes by nearly $650 million. With the expansion of car donation industry in America and elsewhere, donors find it easy to donate auto and in return reduce their tax return.
In the United States, critics are of the opinion that auto donation is in reality an alternate for tax shelter. However, at the same time reliance of nonprofit organizations on revenue generation from car donation has been immense.
Advertised as an easy option to dispose off used car and come under the umbrella of tax shelter, there are certain pre and post donation considerations that a donor needs to fulfill so that he can qualify for a significant tax deduction. Apart from following state rules for cancellation of plates etc, post donation requirements include getting a written acknowledgement from the charity pertaining to the sale of the car along with itemized tax deduction.
Benefit To Charities
Many charities worldwide run donate auto programs. Few of them sell donated cars themselves while others carry out the process with the help of auction companies. Similarly, there are companies that collect and sell the vehicle for its donor and distribute the money to charities, the donor has opted for.
Car Donation, A Noble Cause
Charity can be in any form or shape; hence auto donation can change someone’s life, who is in need in any part of the world. It is that time of the year, when people dispose off their non-usable items, hence if those are utilized for helping any needy, their purpose will be served far better than simply throwing them away.