New Car Donation Laws Cause Charities to Worry
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If you want to donate a car to charity you might find that it isn’t as simple as it once was. This is down to new laws governing car donation. The new rules have come into force to regulate car donations and to stop people from using loopholes in the tax system to commit fraud and tax evasion. Untill recently, if I were to donate my car to charity, I could do so easily and claim a certain tax break on my return with little or no problem. Presently, however, donating a car requires much more diligence and record keeping. Claiming tax breaks on a car donated to charity requires you to record as much information about the car you donate as possible.
Major charities are now worried about the new rules governing car donation and expect them to seriously impact their income from donations. The sale of these donated cars counts as a large part of the annual income of major charities such as Goodwill Industries and The American Red Cross. Those that donate used cars have also been able to claim tax breaks on the value of the car. This is completely legal and was initiated by the government to actively encourage people to donate to charities. However, the government is now tightening up the rules governing these donations, asking that you record much more information.
The primary worry for some charities is that this will cause a decline in the amount of cars donated to them. Although many people donate a car through simple generosity, the tax benefits assosiated with auto donation have always provided them with an additional reason to donate in this manner. As a result of these new rules, combined with the economic crisis, charities are seeing a drop in the number of car donations and in charitable donations on the whole. Most charities count on sizable contributions like this and with fewer people making large contributions, the charities, and those they work to benefit, will surely suffer as a result.
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Source by R.C. Bryan
