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Accident Puts Dent in Charitable Donation

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in Small Business Tax

Q. I arranged to have my car donated to a charitable organization. Prior to the drop-off, the car was involved in a fender-bender. Can I take a charitable deduction for the loss in value or for the full value before the accident? R.C.D., Providence, R.I.

A. Unfortunately, since the car was still in your possession, you can’t deduct any reduction in value due to the accident. Your charitable deduction is based on the vehicle’s condition as presented to the charity at that time and date. Although you may qualify for a casualty-loss deduction, the limits for personal assets are daunting. In short, you can deduct casualty and theft losses for the year (after subtracting $100 per event) only to the extent that the total exceeds 10 percent of your adjusted gross income. Tip: Charitable deductions for vehicle gifts are generally limited to the amount that the charity nets by selling the vehicle

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