Foil the tax man, but do it quick
Published 7:00 am Saturday, December 4, 2004
Is it too soon to start thinking about the 2005 Rotary Auction? We would have thought so too. Customarily on this island, one hoards in December and divests in June, and Christmas was still a month off when Rotarian Jim Chapel turned up in the newsroom on a recent afternoon.
But as certified fans of the annual auction and rummage sale – a sociologist’s dream case-study in philanthropy, recycling, consumerism and mass hysteria – we allowed Jim to buy us lunch at one of Winslow’s finer establishments and make his pitch.
The information from he and fellow Rotarian Rob Jacques was indeed timely for those who may be inclined to donate a used vehicle at next summer’s fund-raiser.
But first, a little context. While last year’s auction obliterated all previous marks and expectations – $296,000 was raised for community projects and causes – it did so without particularly robust sales on the used car lot. Donations of “quality pre-owned vehicles” were down in numbers. Also, there were no marquee automobiles – like the vintage Cadillac donated for the 2003 event – to create a buzz among punters and heat up the bidding.
Now ideally, we don’t consider “giving” in terms of what we ourselves will get out of it. But the tax advantage of large charitable donations like vehicles certainly looks good when April 15 rolls around – and whether you’re tired of profligate social spending (Republicans) or profligate military spending (Democrats), who doesn’t want to keep a few bucks out of the hands of Uncle Sam?
Which brings us back to the information our friendly Rotarians had to share. Turns out that imminent changes in the federal tax code are disadvantageous to those who donate motor vehicles to charitable causes.
Jacques explains it this way:
“On New Year’s Day, the old tax law allowing car owners to donate vehicles to charities for ‘fair market value’ goes away. In its place is a revised law that limits tax benefits to the actual sale price of vehicles valued at $500 or more. That means if the charity sells the vehicle for $50, that’s all the donor can claim on his or her tax return.”
Jacques reports that a forewarned Andy Roby recently became the first donor to next summer’s auction, handing over the keys to a 1986 Oldsmobile Custom Cruiser. The nine-passenger car with 76,000 original miles is certainly worth more than $500, but who knows what it might sell for at auction?
“Anyone wishing to take advantage of the far more generous 2004 tax allowance must act before midnight, Dec. 31,” Jacques notes. “After that, the old tax allowance turns into a pumpkin!”
All of which boils down to this: If you have car to give to the 2005 Rotary Auction, donate it in 2004. Now fielding inquiries and/or pledging garage space for the next six months are Jim Chapel (842-2093) and Ralph Spillinger (780-8338).
We now return to our regularly scheduled December.
