If Santa left you a shiny new bike under
the tree this year, or if you're taking advantage of some of the great
sales going on right now, you may want to think about the benefits of
donating your old motorcycle to charity.
Benefits of donating your cycle:
- Your donation can be tax deductible
if you itemize your deductions.
- No need to invest time and money
advertising the sale of your cycle.
- Quick and simple way to get the cycle
out of the garage. Often, the charity even picks it up.
- Great way to sell a cycle that needs
mechanical work. Some charitable organizations can sell the cycle for
parts or repair it for a higher resale value.
- An opportunity to give back to a good
cause - especially during the holiday season.
But donation may not be right for
everyone. If your primary reason for wanting to donate your bike is to
get the most money you can, donation may not be your answer. Tax laws
changed in 2007, so you must deduct the "fair market value" as opposed
to the "retail suggested price." Fair market value, according to the
IRS, is the price which property would change hands between a willing
buyer and a willing seller, neither having to buy or sell, and both
having reasonable knowledge of all the relevant facts." Good resources
to determine the fair market value are Kelly Blue Book and Edmunds.
Maximize your tax benefit
To receive the maximum tax benefit,
make sure you choose a charitable organization where the cycle will be
used "in direct furtherance of the organization's charitable purpose."
The organization should use the vehicle for its business itself or
donate it to those in need. That way you can deduct the full market
value of your vehicle. You also need to make sure the charitable
organization is one that the IRS qualifies to receive tax deductible
contributions, such as churches, government agencies, nonprofit schools
and hospitals, as well as organizations such as the Salvation Army or
Red Cross.
Verify with your local tax professional
on how the tax laws apply to you and which tax forms the government
requires. The charitable organization that you are donating to can
oftentimes answer a lot of your tax questions too.
Where to donate your motorcycle
Some organizations that we found
accepted motorcycles for donation include: Rawhide, Habitat For Humanity
and Cars 4 Kids. It's worth checking to see if these organizations
qualify for that "maximum tax benefit." Cars 4 Kids even offers a free
vacation voucher with your donation. Approximately 2-4 weeks after you
donate your cycle, you will receive a voucher for a 2-night, 3-day hotel
stay at one of over 80 resort areas across North America.
Before you choose an organization, make
sure they service your area. Most of them will pick up your vehicle
right at your house - whether it's running or not. Check to see if there
is a cost to tow it or if that will be deducted from your value; most of
the time it's free.
Preparing your cycle for donation
Clean your motorcycle and put it in the
best working condition you can. Have the title readily accessible as you
will need that signed before transferring it to the charity. Have all
sets of keys together and remove the license plate. Make sure you have
the correct paperwork completed that the organization requests.
If you want to take advantage of the
tax benefits in 2008, donate your motorcycle by December 31. The
motorcycle does not need to be picked up by December 31; you just need
to have the charity's forms completed by then. And don't forget, some
donations require a professional appraisal, so you'll need a fair amount
of time to schedule that.
Not enough time to claim the donation
in 2008? Start the process now and reap the tax benefits in 2009!
