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There usually is not much guesswork in calculating the tax deduction for your donated RV, which often happens with car donations.
Why? Because IRS rules on figuring the tax deduction for a donated vehicle are based on how the charity uses the donation.
If the charity sells the vehicle for proceeds -- which often happens with RVs -- the donor must use the resale amount as his/her tax deduction.
Donated RVs, including campers, trailers and motor homes, typically are sold by charities, which do not have use for them in their programs and services.
But there are exceptions, in the rare situations where the charity keeps and uses the RV donation to further its charitable mission.
The RV donor then has to figure the price, based on fair market value and the RV's condition.
When you donate an RV, be careful if the charity says you can use the RV's full value or fair market value as your tax write-off. Generally, the IRS only allows the used vehicle's fair market value if the charity plans to use the vehicle in its charitable work.
The other exception is if the charity "materially improve(s)" the donated vehicle, the donor can deduct its fair market value.
The IRS rules on these exceptions are detailed, so donors may want to get advice from an accountant. Another resource is the free IRS Publication 4302, "A Charity's Guide to Vehicle Donations," covering cars, RVs, boats and airplanes. When in doubt, visit the IRS' website for more information.
When you donate an RV that is valued at more than $500, ask for a receipt.
You should get the receipt when you transfer the donated RV to the organization, and you will need the receipt when filing your taxes to get a write-off. The receipt must contain:
* Your name and taxpayer identification number
* Vehicle identification number, or VIN
* Date of the contribution.
It must also state that the charity did not provide any services for the donation.
Donating an RV or motor home to charity is another form of vehicle donation. Many organizations accepting cars also accept RV donations, and many nation-wide services will process your donation for you.
If your destination charity plans to keep your donated RV or motor home for its own use, or to improve it and re-sell it, you may be able to use its fair market value for your tax deduction.
Determining fair market value will also be important if you made your donation prior to the IRS guideline changes that went into effect January 1, 2005.
The following links can be helpful as you determine the fair market value of your RV or motor home:
*NADA guides let you check values for Recreational Vehicles, motor homes, campers, trailers and 5th wheels with model years between 1986 and 2002.
*RV Pricing Information will provide additional useful information on how to determine the fair market value of your RV if you plan to donate your rv to charity.
Planning to donate an RV to charity? Do some research first on new laws and requirements, because you will need to itemize the contribution when you file your taxes.
The IRS offers free information that explains tax laws enacted in 2005 for noncash contributions.
The publications include:
Publication 526, "Charitable Contributions";
Publication 561, "Determining the Value of Donated Property";
Publication 1771, "Charitable Contributions -- Substantiation and Disclosure Requirements";
Publication 4302, "A Charity's Guide to Vehicle Donations."
Looking for a charity to donate an RV? Family Care Foundation, www.familycare.org, is an umbrella organization with an international outreach.
For the convenience of donors, it will process and collect your donated RV anywhere in the United States.
The charity is a 501(c)3 that makes grants and provides services in developing nations. If you have questions on its finances, Family Care Foundation posts its annual reports on its Web site.
For Americans seeking to donate an RV, the charity offers detailed instructions on how to do it, as well as links to IRS sites, if you have further questions. If you want to donate your RV, you can start the process by filling out an application online.
There are dozens of other charities online that will take your donated vehicles, including RVs, campers, motor homes and trailers. If you need advice in making a choice, contact the consumer division of your state Attorney General's office.
If you plan to donate an RV to charity -- and your RV is worth more than $5,000 -- you may need to get a written appraisal.
The appraisal has to be done less than two months before you make the RV donation, and you need to have a copy of the RV appraisal when claiming a deduction for the RV donation.
If the charity resells your RV for less than $5,000, you do not need the appraisal and cannot list that value on your taxes.
You will be required instead to list the gross proceeds from the sale as the value of your deduction.
Many large charities accept used RVs for donations. They likely won't use them to help the needy, but they will resell them and collect the proceeds.
In fact, vehicle donations are a popular mode of giving, because donors can write off the gift and dispose of an unwanted vehicle at the same time.
Vehicle donations cover RVs, autos, boats, motocycles, even airplanes.
If you plan to donate your RV, consider first you can get a better value by selling it on your own. If you have your heart set on giving to a good cause, check out the charity where you plan to donate.
Is it a 501(c)3 organization recognized by the IRS?
How will it use the proceeds from your RV donation?
What portion of the proceeds will go to direct services and what portion will cover administrative and processing costs?
These are just some of the questions you may want to consider before you donate an RV.
Many Americans know they can donate their cars to charity and take a tax deduction for it, but did you know you can also donate an RV, and it is tax deductible, provided you follow IRS rules.
Charities registered as a 501(c)3 that have RV donation programs will take your used RV and resell it for the proceeds to benefit their causes.
In return you may get a tax deduction equal to the resale proceeds.
Typically, charities with RV programs accept most kinds of recreatiional vehicles, including motor homes, pop-up trailers, truck campers and trailers.
You will need your RV title to transfer the vehicle to the charity. If you lost it, you will have to apply for a new one.
|Sheri Ann Richerson|