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December 2, 2004 09:46 AM

Get Your Car Ready for a Fast Giveaway


Excerpt: If a lot of old cars disappear from your neighborhood before the end of the year, don't blame thieves. Blame Congress. After years of fretting that people were ripping off the IRS by claiming exorbitant tax deductions for clunkers that they gave to charities, lawmakers have cracked down with a vengeance.


If a lot of old cars disappear from your neighborhood before the end of the year, don't blame thieves. Blame Congress. After years of fretting that people were ripping off the IRS by claiming exorbitant tax deductions for clunkers that they gave to charities, lawmakers have cracked down with a vengeance.

Under the current law -- which covers donations through December 31 -- you can deduct the fair market value of the car. If it's more than $5,000, you must back up the deduction with an appraisal. If it's $5,000 or less, you get to set the car's value based on estimates from used-car dealers or Web sites, such as Edmunds.com or Kelley Blue Book.

Starting next year, your write-off will be limited to the price at which the charity sells your car. That may seem fair, but because charities go for quick turnarounds by selling vehicles at auction, you'll be stuck with a lower, wholesale price.

Charities aren't happy about the extra hassle involved with getting written sales reports to donors, or the likelihood that reduced tax benefits will put a crimp in the number of automobiles donated. But they are expecting a flood of used cars to roll in before the rules change.

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Read all 46 posts in the same category of Tax:

Few People Aware Of New State Sales Tax Deduction - Dec 17, 2004
Ownership Has Its Privileges - Dec 12, 2004
Bush Rejects Raising Taxes to Pay for Social Security Plan - Dec 12, 2004
Social Security Reform, With One Big Catch - Dec 12, 2004
Bush Eyes Social Security Threat - Dec 12, 2004
Put Away Your Check Book - Dec 10, 2004
IRS to Issue Rules On Tax Shelters - Dec 09, 2004
Year-End Tax Planning Moves for Small Businesses - Dec 08, 2004
Give Tomorrow, Get the Tax Break Today - Dec 08, 2004
2004 Year-End Tax Planning Moves - Dec 08, 2004
CCH Capital Changes Identifies Top Ten Tax-Complex Corporate Actions for 2004 - Dec 07, 2004
GainsKeeper Suggests Year-End Tax Planning Strategies to Minimize 2004 Taxes Owed - Dec 07, 2004
Stocks That Need Special Tax Moves - Dec 07, 2004
Poll: Social Security Needs Reform - Dec 07, 2004
Options Open On Tax Reform - Dec 07, 2004
More Tips to Slash Tax Tab - Dec 05, 2004
10 Tax Time Bombs To Defuse Now - Dec 04, 2004
Property Taxes Rising Nationwide - Dec 04, 2004
Noncash Gifts To Charities Can Be Deducted - Dec 04, 2004
2004 Year-End Tax Planning Moves - Dec 02, 2004
Don't Fear the Use-It-Or-Lose-It Rule - Dec 02, 2004
Partnerships Lose Tax Exclusion On Canceled Debt - Dec 01, 2004
A Tax Break for Your Kidney - Dec 01, 2004
8 Profitable Year-End Tax Moves - Nov 29, 2004
Tax Break Curbed: Changes To Donation Write-Off May Hurt Charities - Nov 28, 2004
When Is That Holiday Turkey Taxable? - Nov 26, 2004
Your Next Tax Hike - Nov 26, 2004
Line Up Your Tax Deductions - Nov 26, 2004
Last Chance to Trim Your Taxes - Nov 23, 2004
Know Your Optimal Year-End Tax Strategies - Nov 22, 2004
To the Point of No Returns - Nov 22, 2004
Turning the Tax Tables to Help the Poor - Nov 22, 2004
With Checkbook in Hand, Think of Uncle Sam - Nov 22, 2004
Moratorium On Web Tax Advances - Nov 17, 2004
25 Ways to Spend Your Flex Account - Nov 17, 2004
Bush Advisors Urge Deeper Tax Cuts In 2nd Term - Nov 17, 2004
The Best Way to Save on Health-Care Costs - Nov 16, 2004
Use it or Lose It - Nov 16, 2004
A New Twist To Your Tax Bill? - Nov 16, 2004
Taxes and Consequences: The Second Term Begins - Nov 13, 2004
Microsoft Payout Tempts Investors On Tax Strategy - Nov 12, 2004
What the Recent Tax Changes Mean to You - Nov 07, 2004
Highlights of 2004 Changes in the Income Tax Laws - Nov 04, 2004
Bush's Tax Cuts Are Unfair ... To the Rich. - Nov 03, 2004
No Rest for the Bleary: New Tax Turns to Ponder - Nov 03, 2004