Donating a car or boat to a charity is no longer as attractive as it once was, and, since a 2005 tax rule change, the paperwork required is a lot more extensive. That means advisors need to examine their clients' reasons for giving, and make sure they act well before year-end.
Before the rule change, an individual could donate a car to a charity and deduct the fair market value as determined by Kelley Blue Book or a similar resource. However, since 2005, individuals have only been able to deduct the actual amount the charity receives from the sale of the car.
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