The IRS Audit Blog

Posts Tagged ‘donation’

Donate Your Car by December 31 for a 2010 Tax Deduction

VAN NUYS, Calif.–(BUSINESS WIRE)–Tips to safely navigate the car donation industry and maximize your 2010 Tax Deduction

Car donation CT Connecticut=Huge IRS warning!

Question: Car donation: no deduction if sold “for parts” by the charity?

We recently donated a car with a private sale FMV of around $1700. The charity (Special Olympics) sent a 3rd-party shop to pick up the car; they gave us a ‘provisional’ receipt (Form1098) for $500, and told us that they would send us the adjusted one once the car sells. We just found out from them that they have decided to sell the car “for parts”, and they claim that this means we cannot deduct any more than the value of $500 already on the temporary 1098 which they gave us when they picked the car up.

Is this correct? I have looked at the IRS publication 526, and cannot find any special rules governing value in a “for parts” sale. We are feeling very screwed at this point — the shop has our car and title, and we’re only getting the deduction of $500 (which translates to probably $200 in our pockets). We feel like the car has essentially been stolen from us.

Is the only solution here to never donate a car? Anyone else have any similar experience? Advice? Thanks.

Answer: I suspect they only got $500 (or less) for the parts. Otherwise they would give you a 1098-C showing the amount they received.

They would be inclined to do so because a) they are required to and b) it is generally in their best interest to keep donors happy by providing them with the larger tax deduction.

Of course there is the possibility that they were too lazy to account for it.

BusinessWise: Social Security and divorce

You may be eligible to receive Social Security benefits based on your ex-husband’s work, if you are not entitled to a higher Social Security benefit on your own record. You can receive benefits if you meet certain criteria.

Donate a Vehicle to Charity Tax Deduction 2009, 2010.mov

Question: IRS Form TDF 90-22.1 – Reporting Foreign Bank Acct.?

If you have a Goldmoney.com account, is that considered a Foreign Bank Account requiring completion of the TDF 90-22.1 form?

Answer: Yes, since they are incorporated in Jersey in the Channel Islands. If the aggregate value of your foreign holdings is $10k or more at any time during the tax year you must file the TD F 90-22.1 report by June 30th of the following hear.

Finance and Banking

This updates our March 17, 2010, In Brief Tax client alert discussing new proposed regulations governing the reporting of foreign bank, brokerage and other foreign financial accounts (“FBAR”) on Form TD F 90-22.1 (Report of Foreign Bank and Financial Accounts).

Community Calendar

Deadline for items for the Community Calendar is Wednesday noon two weeks before desired publication date. Send information on fund-raisers, clubs, lectures, community events, reunions and support groups to Community Calendar, Pioneer Press, 3701 W. Lake, Glenview IL 60026; Fax (847) 486-7495; or e-mail to jmolitor@pioneerlocal.com. There is no charge for publication.

Come Join Our Celebration Lunch

Coming up in the Chesters, Mendhams, Harding and Washington Twp.

THURSDAY, Jan. 7 The Chester Lioness Club will celebrate the new year with a dinner and meeting at 6:30 p.m. in the Lamplighter Restaurant, 190 W. Main St. The speaker, Jill Lattmann, will discuss health tips and easy ways to obtain the seven to 13 servings of fruits and vegetables a day as recommended by the federal government for good health. The public is invited to attend by reservation only …

Ride for Lights