New tax deduction limitation for gifts of cars
Thanks to the "tax-and-spend" Bush Administration, the IRS has imposed greater limitations on charitable deductions for autos, boats or planes to support nonprofits, effective January 1, 2005.
Taxpayers should note that the American Jobs Creation Act of 2004 altered the rules for the contribution of used motor vehicles, boats and planes after Dec. 31, 2004. For donations after that date, if the claimed value of the donated motor vehicle, boat or plane exceeds $500 and the item is sold by the charitable organization, the taxpayer is limited to the gross proceeds from the sale.
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