Sell or Donate That Clunker?
Roy Lewis from Fool.com gave out a great summary of how to properly donate a car and claim tax benefits. The bottom-line, IRS is growingly aware of tax avoidance practices by inflating the value of donated cars and one needs more proof to support the deduction claim.
Roy's advice of the paperworks to support your claim:
- Attach a reasonably detailed description of the vehicle.
- Take pictures of the car, inside and out -- even the engine. Remember that a picture is worth a thousand words. Attach the photos to your return.
- Attach pages from your local Auto Trader or similar publication that advertises used cars for sale. Find vehicles that are similar to yours in looks and condition and factor those advertised sales prices into your FMV analysis.
- Get the blue-book information and attach it. While it's not the only source to prove valuation, it's one that will help with other sources.
- How about a testimonial from your local mechanic or auto dealer? A simple statement claiming that the vehicle is in running condition with no known or apparent malfunctions would be a good thing to attach to the return. Heck, even if there are some problems with the vehicle, see if the mechanic will state the amount of money to fix the problem. You can then factor that into the correct FMV of the vehicle.
It is kind of relief to know lots of people elsewhere around the world are paying much more for gas. Read
Insurance Information Institute (III), the insurance industry's reliable information source, reports that "[t]he cost of auto insurance is expected to rise by 3.5 percent in 2004, the smallest increase in four years." The average auto insurance cost in 2004 is estimated to be $871 per ... Read
MSN Money's Jennifer Mulrean researched a number of online shopping bots for us. The result: with the exception of PriceGrabber, all shopping bots give listing preference to merchants who pay them, although you can still sort by price within the search results. These services also ... Read
In this Bankrate.com article, Greg McBride suggests that we should not think of home appreciation, defined as selling price minus purchase price, net all closing costs and commissions, as profit. Read
