Mister Quickie

I put my car up for sale and a rep from www.racingdreamz.org asked if I'd be willing to donate to their 501c.
In order to net the same as what I'm willing to sell it for it would have to be appraised at roughly 3x as much. (since you get ~1/3 back on your taxes)
Obviously I have records etc that can demonstrate what I've put into it but that may not translate into the appraisal number.
Question though is this a scam, has anyone done this and if so, what was the outcome?

PaulD_944S2

Real question is:

Would it survive an IRS audit?

SloMo228

Numbers aside, I'm not sure I could bring myself to donate my 944. I have so much time and effort into it that if I ever decide it's time to move on, I would hate to do anything except sell it on to another enthusiast who would take care of it.

I know it's irrational, but I have a sentimental attachment to this thing after the years spent driving and wrenching on it.

nkgosselin

I think the tax law changed so you only get to deduct what the vehicle sells for. Not appraised value. Could sell for very little.

nkgosselin

Just went to site. Yeah. It could be beneficial as a net positive if you got a great appraisal.

But the real question is do you support the mission of the charity? If so that is a plus.

Jfrahm

You can deduct fair market value under some circumstances. If the charity just dumps the car you can't write off fair market value. They have to use it or fix it up or sells/gives it to a needy person as part of their charity's work (this might be the mission of this particular charity).

For it to be a decent deal for the seller/taxpayer you'd need to set the fair market value at 2x or 3x of what you can sell it for. If your car is a parts car that'd sell for $2K but you might claim fair market is $9K and your tax bracket is 33% then you net $3K which is more than $2K, but perhaps at some risk.
I would suggest paying for a tax service that represents you at the audit.

https://www.edmunds.com/sell-car/doe...irs-rules.html

V2Rocket

No.
Cash sale of car = no tax...and deductions only go so far.

RacingDreamz

Hello everyone. I'd like to add something here to resolve some confusion. First, this is NOT as scam. We are a 501c3 non profit charity. Anyone is free to contact the IRS on us. Plus any charity reporting organization, such as GuideStar.
Per IRS rules, it is true that IF we sell the car for funding after donation, we have to report the amount of the sale back to the donor for their tax reporting. However, if the vehicle is used by our charity, then we can provide the donor a "Statement of Use" which is the case. We do NOT sell vehicles for funding. We use them. If the vehicle is valued at less than $4999 there is no appraisal needed. If vehicle is valued at or more than $5000, then an accredited appraisal is needed. I have just recently provided links to appraisal companies as this issue of a vehicle over $5000 has not ever come up. However in any and all solicitations to individuals, I do provide links to our website AND the IRS rules on donating vehicles. We do not want anyone feeling like they are being tricked or scammed in any way. Racing Dreamz just does not operate that way and NEVER will. We have been donated a few vehicles and everyone that has donated has never had any regrets or issues. The only issue that has come up is the condition of the vehicle that was donated. And we raised these with the donor. For instance, being donated a car that was supposed have only electrical ignition problems, turned out to be a siezed engine and a stripped transmission. Another vehicle with only a bit of frame rail rust, turned out to be needing complete floor pans as they were rotted out. So, we dont like the thought of anyone feeling cheated or scammed as we know that feeling.
So in closing this and hoping to quell any thought of dishonesty, anyone with any questions are free to contact me. I am the Chairman of Racing Dreamz. Thank you.

RacingDreamz

I meant to add this link if anyone wants to research this further. This is the link I supply to each and every person that we contact about donating their vehicle.

https://www.irs.gov/pub/irs-pdf/p4303.pdf