Max out your charity donation with a ‘bargain sale’ — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
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Max out your charity donation with a ‘bargain sale’

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in Small Business Tax,Small Business Tax Deduction Strategies

If you've been thinking about donating your used car to charity, don't drop the idea just because of last year's law that put the squeeze on big-ticket donations. That law curbed your potential to be aggressive in placing a high value on the donated item. But by taking a different route, you can still get your money's worth.

Strategy: Arrange a "bargain sale" of the item to a qualified charity. Unlike a straight charitable donation, you'll earn cash back from the charity, plus a sizable deduction based on the item's fair market value.

The charity wins, too. It gains an asset that it can use for its own purposes or resell at a reasonable price. A number of groups actively pursue bargain sales of boats and cars on a regular basis (see box at right).

How it works: When you sell assets, such as cars or boats, to a qualified charity at a bargain price, you treat part of the transaction as a sale and the other pa...(register to read more)

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