Are you an individual donor or a charity that is interested in a California vehicle donation charity program? Vehicle donation programs can be very beneficial to charities. However, it is important that both donors and charities be mindful of the paperwork that must be accurately maintained in order for both parties to benefit from the transaction. In this article, some of the paperwork requirements will be discussed for both the donor and the charity for transactions in which an individual donates a vehicle and the vehicle is sold with the profits going to the benefit of the charity.
While there is little paperwork that the donor has to create, there is paperwork that the donor has to produce and maintain in his or her files. When the donor presents his or her car to the charity or the charity�s agent the donor should also provide the title to the car.
After the car has been donated, the charity should provide the donor with written documentation of the sale, including the sale price, within 30 days. It is important that this information be maintained with the donor�s tax documents if the donor is claiming a tax deduction for the vehicle.
Charities should also keep a variety of written records. For example if a charity participates in a California vehicle donation charity program that involves the use of a vehicle donation agent then the charity should maintain records concerning its oversight of the agent. If the charity neglects to keep documentation of this oversight it risks losing its charitable legal status. However, these records are not difficult to keep and it is often worth the extra effort for the monetary benefit the donated cars provide the charity.
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Charities are also required to provide documentation to donors within thirty days of their car donation. This documentation has to follow specific guidelines and include all of the required information so it is important that charities consult www.irs.gov or their accountant in order to develop a model for this documentation. After the model has been developed, it should be very easy to amend it for each individual donor.
These paperwork requirements are very easy to meet, especially when you consider the great benefits that donated cars can have for California charities. When the economy slows down, charitable donations usually slow down with it. People do not have as much disposable income to spend on charitable giving because every dollar goes to paying the necessary bills. However, they may have old or junk cars that they are anxious to get donate and will provide their favorite charity with much needed funds.
So, it is important to remember that if either party fails to maintain the proper paperwork then it could open then it could make them vulnerable to tax penalties or lawsuits. However, proper maintenance of all of the paperwork is easy to do and donors and charities can easily avoid those rather unpleasant potential consequences and make a California vehicle donation charity program beneficial for all parties.