Help Me Hank! Car donations
Help Me Hank: Help Me Hank! Car donations
You've got three choices when its time to dump your wheels: sell the car, trade it, or give it away.
When Suzanne Okerfeltís daughters left for college, she didn't need their 90's era clunker, like this one, anymore. So Suzanne decided to give it away to charity.
"Here was our opportunity to make a small difference to someone."
The car was 11 with a lot of miles, but in good condition.
"We had the engine replaced, a new stereo, it had a remote start, new tires."
Being a teacher, Suzanne knows all about homework, so she did hers on the right place to donate the car and how much it was worth.
"We'd been given an estimate of about $500 to $700."
The wheels of Suzanne's donation were in motion and it was win win. The charity gets a gift. The Okerfelts get a deduction.
"I would be foolish to say that we weren't going to include it on some level in our taxes."
Soon a tow truck came. Soon after a thank you note from the charity arrived for the Okerfelts donation of $12.50.
"I showed it to my husband. He said no that's got to be a mistake."
Suzanne was devastated that both the charity and her family came out as losers.
"And that's when I said I've got to make someone aware of it."
What we are aware of is that starting last year, there are new rules about tax breaks for car donations.
We called the IRS tax gurus to find out what that meant for Suzanne.
Turns out that Suzanne's car was sold to a junkyard for $50. The donation place then subtracted its fees. The remainder was just $12.50. And the new rules say that's the tax deduction.
Hank Phillippi Ryan
"If they sell the car, the taxpayer can only deduct the amount thatís actually given to the charity."
So the rules say this donated car was only worth a $12.50 deduction. But Suzanne says at least she can donate some advice.
"If I could do this tomorrow I would have kept the car, sold the car, and given the money to charity."
If you're planning to donate a car check out the link below for the new tax rules.
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