When my old car’s engine burned up, and the repair estimate far exceeded its value, the (very reputable) repair company gave me the choice to tow it back home or sign it over to a charity for a tax deduction. I did that.
The charity now sent me a letter that makes me wonder about it. They say they will repair the car and give it to a family with needy children to care for. Seems really vague.
They have a website and some registration information about being a non-profit.
And it says they take other kinds of donations, but the only active links are for car donations.
It says they are registered as a not-for-profit, but I know those can pay salaries to their officers. Plus, if they give the cars to their own unemployed children, those could just sell the cars to live off donations.
Or am I being too cynical?
[ Mod: Please remove link if you think this is a plug, but it’s quite the opposite.]
I do not know if this particular charity is legit, but there are two lines in your post that I found, well strange
and
So they fix it up to sell it for less than they have invested? Lose a little on each one but make it up in volume?
Or are you suggesting they are selling them outright for junk and getting maybe $50 for each? You would have to get a fair amount of donated cars to make a living this way.
There are several web sites where you can look up information about charities and see copies of their tax filings. Since this one is rather small, it isn’t require to file a 990. However, it is a tax deductible charity and it has been around for a few years.
No, as stated, they sent me a letter saying they will fix the car and give it away. Presumably, if they have a mechanic around somewhere (perhaps it’s a one-man garage, for all I know) then they could fix it. It was an engine fire. Most of the damaged parts are the soft ones, hoses and belts and gaskets. So it’s a small parts bill but a huge labor bill (for me), but not if you’re the mechanic and have lots of time to kill. And since they just plan to give it away, they could put it on the books at zero income, despite coming out ahead one salable car.
They claim less than the filing minimum of $25000, and that may be on purpose.
So now I definitely feel like it’s a flaky charity.
Next time I’ll go with a name I recognize, like the Red Cross.
There could be several possiblities for repairing the vehicle. Perhaps they have an arrangement w/ a vocational training facility.
I have to wonder why they would bother to contact you and explain what they were doing w/ the vehicle? That doesn’t sound like something an illegitimate charity would do.
They may not have a couple years ago. See the IRS changes posted above. Now, tax deductions are limited to the price the charity sells the vehicle for, if they sell it, rather than the “fair value”. This implies that they have to tell you what they did with the vehicle. Several years ago, I donated a vehicle, and got a grossly inflated statement of “fair value” from the charity when they picked it up. SOP - I hadn’t even told them what I thought it was worth - they decided. But, hey, THEY issued it, so I deducted that much on my taxes, with perfectly good documentation for it. The IRS has now clamped down on this, because too many people were writing off $5000 for donating a 12 year old Toyota with a blown head gasket and a crumpled fender.
FWIW, when I donated a car a few years ago, I wondered about the legitemacy of the recipient, and went through Car Talk’s website, figuring that they would have vetted the associated charities. How much my local NPR station actually received, I dunno.
