Is The Kelley Blue Book Used For Charitable Auto Donations?
The Kelley Blue Book – Deductions and Appraisals When Donating A Car To Charity
There was once a time when the Kelley Blue Book was used by most people when they were looking to find out the value of their car and at when taking deductions at the end of the year for their auto donations. However, since 2005, IRS regulations have much more clearly stated how one can value a vehicle that is donated to charity.
Was The Donated Vehicle Drivable?
This has had a very large impact on vehicles that don’t run or are otherwise unsuitable to be given to anyone to drive. Such vehicles were, for many years, assigned a value out of the Kelley Blue Book, as if they ran.
What most people failed to realize is that even the “poor” rating in the Kelley Blue Book referred to cars that were legal and safe to drive as well as actually moving under their own power. However, most cars that were donated to charity in the early ‘aughts were not even running – often rusted hulks there were good for little else than parting out after a wholesale auction. This is, of course, where most of them ended up.
Reading The Kelley Blue Book
Despite this discrepancy, it is very common for people to take deductions that are listed under the “fair” column of the Kelley Blue Book rather than what the car was actually worth. When you read it carefully, the “fair” description of a vehicle actually describes one that is in rather good shape.
That’s where the IRS stepped in. After a report to the Senate Finance Committee from the US General Accounting Office in late 2003, it became apparent that more than half a billion dollars had been deducted that were not actually given to the charities in question. This was partly due to people taking the wrong values for their deductions from the Kelley Blue Book.
However, the biggest culprit that made this formerly small loophole a large-scale tax dodge were for-profit companies that handled the donation and sales for non-profit organizations. Many were quite small NPOs that didn’t have facilities for taking care of non-running donations. These companies furthermore were encouraging people to take the maximum benefit from the Kelley Blue Book that they could find.
Car Donation Tax Deduction – What Does The IRS Expect?
Of course, this is not what the IRS ever meant. However, the regulation has since been clarified to more accurately reflect what was meant by fair market value. It means that rather than taking the highest available Kelley Blue Book value, you should choose a value that someone would actually be willing to pay if you were selling the car yourself.
To further clarify this, they have also ruled that if the car is worth less than $5,000, the value claimed for any car that is directly sold is the sale value of that vehicle. So, if sold on the wholesale market by a third-party agent, you could only claim that amount, even though it may be a fraction of what your car is actually worth, regardless of the Kelley Blue Book price.
Vehicles that are thought to be worth more than $5,000 should be verified by an independent auditor and photographed for documentation purposes. One doesn’t have to actually attach either of these (or a photocopied page of the Kelley Blue Book) to their tax return, but a Form 8283 must be attached, even for donations of more than $500.
So, though you can’t simply take the highest value available for your make and model from the Kelley Blue Book, you can still use it to help you determine what someone might pay for a car with the same coughs and dings as yours, just as anyone deciding what the market will allow. You should also consider what cars are selling for in the newspaper.
Even if you can’t get much out of the corrected Kelley Blue Book value of your car, donating to charity is a good way to make an impact in your community. Moreover, you can usually claim up to $500 without too much bother, and most people can use even that small of a tax deductible if they’re self-employed.
Getting A Free Online Auto Insurance Quote
How Do You Go Using The Internet to Get an Auto Insurance Quote?
The Internet makes everything so much easier these days, as can be seen in the process of getting a free online auto insurance quote. Several years ago, getting an insurance quote was a very tedious and time-consuming process but now, thanks to the Internet, it can all be done in a matter of minutes.
The process of requesting for quotes may have become so much more convenient but this does not mean that you should be any less careful. In order to avoid becoming a victim of scammers or even of unreasonably priced insurance plans, it is very important to ask for several online auto insurance quotes and to choose from these wisely.
Finding Recommended Auto Insurance Quote Websites
When getting online auto insurance quotes, there are a few different approaches you can use. One is to visit the websites of the insurance companies one by one. Another method is to use a quote comparison website, which will save you a lot of time.
One of the most popular quote comparison sites today is called the Insurance Hotline. All you have to do is enter some information about yourself and your vehicle and you will instantly get a list of online auto insurance quotes from the top insurance companies in your city or state.
The Insurance Hotline itself is not an insurance company but it will be able to point you to the insurance company that will be best for you. It will show you which company offers the widest coverage, the lowest rates, and essentially the best plans. In addition, you can also use it to find quotes for home insurance, life insurance and a few other insurance plans.
Another widely used online auto insurance quote comparison site is Grey Power. Although a relatively new company that has been in operation for approximately ten years, Grey Power is still one of the oldest and most reliable quoting services that you can find anywhere. If you get in touch with them, whether online or offline, they will be able to give you a quote on the type of auto insurance you need within minutes.
Regardless of how you get your online auto insurance quotes, the most important thing to keep in mind is to fully understand the details and terms of a plan before signing any contracts. You don’t want to find yourself stuck at a high interest rate or low-quality service several years down the line.
