Planning on donating a car, truck or van to charity? Remember that your deduction has nothing to do with kelly blue book or other fair market value estimates. The charity has to send you a letter telling you how much they sold you vehicle for – there is your deduction. If they decide to keep it for use in the charity, you can take fair market value, but the charity has to notify you they kept the vehicle.What happened was that too many people were taking inflated values of charitable donations versus what the charities were reporting as vehicles sold. The difference was tremendous and Congress finally stepped in and required the charity to tell you what they sold the vehicle for back in 2005. So make sure the charity sends you either a letter or a form 1098-C saying how much the vehicle was sold for (the 1098-C is preferable because they reported it to the IRS).
Brian’s Tax Musings
You can deduct cash, non-cash items, mileage and out of pocket expenses donated to charity as a charitable deduction, but not the value of your time. Regulation sec 1.170A-(g) disallows any contribution of services to charity as a deduction. Sorry, but time donated to charity is just that – charitable.
Brian’s Tax Musings
When can you deduct mortgage interest? (This applies to both a first and second home):1. You must have title.2. The mortgage must be in your name (or have your name on it).3. The home must secure the mortgage (or it is not home mortgage interest).4. You must make the mortgage payments with your money.Sometimes the last item can be accomplished with gifts, but know these rules before getting a mortgage, so you actually can deduct the interest.