Charities See Increase In Car Donations

[jeffrey]

With the new tax code change that changes the amount of money that can be deducted on federal taxes when donating a car to a charity, charities across the US are seeing a slight increase in the number of vehicles being donated. The charities aren't sure if it is the giving spirit or the tax change that is causing this effect.

Starting January 1 when the new tax law takes effect, you can no longer deduct the "fair market value" of a car donated to a charity on your itemized taxes if that car is sold by the charity to raise money. Instead, the amount that can be deducted will be the amount the car actually sells for which is usually well under the "fair market value."




While many charities believe that the new law will dry up an important fund raising source believing people will be less willing to donate when the tax deductions are far less, there are a few who think donations will actually increase. They reason that tall the publicity will help spread the word to people who never thought of donating a car to charity before and thus increasing overall car donations.