Should this qualify as charity

[callmefence]

I know a young man with a young family.
He depends on having a pickup to make his living. His truck layed down on him (it's fatal)
I 've been letting him borrow a dodge 1500 that I own and have no use for.
I've decided I'm gonna give him the truck. He is honest and works hard, I believe he will make the most out of it.
I 've got the gift affidavit figured out. He won't have to pay sales tax.
Can I deduct it as a charity donation?
I've been told if he's on government assistance.maybe. He is not.
I know if I donated to charity that gave rides to underprivileged inner city , minorities..No problem.

I also know the obvious. I will ask my cpa.
Thought I would ask y'all first.

 

[1982vett]

I'd say no...not charitable. Just a gift to help a person out. If it's a depreciated vehicle, $0 sould be it's disposition value.

Might get the job done if you give it to your church with the understanding they give it to the individual....but don't advertise that either.

Look up publication 526.

 

[skyhightree1]

Id imagine not.

 

[TexasBred]

Fence I really have no idea although I'm thinking it probably wouldn't. I do know it will make you feel like jumping up and clicking your heels together when he drives off with a big smile on his face. God Bless You.

 

[Jogeephus]

I did something similar last month for an elderly lady who in my opinion is an angel. She is a Dodge fan and had a 20 year old Cherokee that was giving her problems and its just wrong for an 89 year old lady to be stranded so I ended up buying her a 2016 Journey. Problem was if I gave it to her the government would expect a cut in the form of a gift tax and I wasn't about to voluntarily pay taxes and she just doesn't have the money. To avoid this I titled it in my name and worked out an arrangement with the insurance company. Getting a tax break was never crossed my mind. Just trying to do what is right by the lady. Doing it this way it saved us all a bunch of gov't hassle and if and when she dies the vehicle will not pass to her POS daughter. Both of us are happy and the smile on her face and container of chicken salad she gave me made it well worth it.

 

[Caustic Burno]

The state of Texas won't as they will want to collect tax on title transfer.
They will assign a value to the vehicle.

 

[callmefence]

The state of Texas won't as they will want to collect tax on title transfer.
They will assign a value to the vehicle.

This is incorrect. You can gift a vehicle it requires jumping through some hoops but I've done it.
What does not work is a low ball bill is sales. They will use book value. But you can gift a vehicle by going through the proper channels.
With no sales tax on title transfer

 

[SteppedInIt]

The state of Texas won't as they will want to collect tax on title transfer.
They will assign a value to the vehicle.

This is incorrect. You can gift a vehicle it requires jumping through some hoops but I've done it.
What does not work is a low ball bill is sales. They will use book value. But you can gift a vehicle by going through the proper channels.
With no sales tax on title transfer

This is true. We have an old pick up that just about all of us in the family has owned when needed. We just gift it, I think they charge $6 for the title transfer, no tax. Biggest hoop is having to get it notarized.

 

[Caustic Burno]

You better go read that law you can't just gift to a friend or someone you know.

http://comptroller.texas.gov/taxinfo/ta ... 14-317.pdf

Read eligible gifts

 

[Nesikep]

Around here you can only gift a vehicle (for sales tax purposes) to a family member... And you can't get any income tax deductions from it.. I'm not even sure if you donated it to a charitable organization if you could deduct the value.

For sales tax purposes, you can trade vehicles of similar value.. If that young feller had a non-running truck and it was a similar year/book value to the one you gave him, neither of you would pay sales tax to put it in your name (up here at least)

 

[Nesikep]

I should add that when you declare a vehicle under a certain percentage of blue book value, you have to say why it's less than value.. I've sold many vehicles with the engines separate from the deal

 

[Caustic Burno]

Around here you can only gift a vehicle (for sales tax purposes) to a family member... And you can't get any income tax deductions from it.. I'm not even sure if you donated it to a charitable organization if you could deduct the value.

For sales tax purposes, you can trade vehicles of similar value.. If that young feller had a non-running truck and it was a similar year/book value to the one you gave him, neither of you would pay sales tax to put it in your name (up here at least)

Same here has to be kin or distribution from the estate.

 

[callmefence]

I'd say no...not charitable. Just a gift to help a person out. If it's a depreciated vehicle, $0 sould be it's disposition value.

Might get the job done if you give it to your church with the understanding they give it to the individual....but don't advertise that either.

Look up publication 526.

This seems like it might be a very good idea.

 

[Caustic Burno]

Fence I tried to give a cousin that was battling cancer my moms old Buick she was in financial trouble. The old Buick was 16 years old and had 28k on it. The state wouldn't give an inch as she was not direct kin.
I had to get appraised pay the tax and title transfer now it was t a lot in taxes as the car appraised for 2k due to age. It was worth it knowing she would have a dependable vehicle to get her to treatment.

 

[HDRider]

It might not qualify as a charitable deduction (it won't), but it is quite charitable of you.

You too Jo.

 

[Nesikep]

Around here, the 'principal operator' can be different from the owner, which in cases of liability I think it means it's the principal operator's insurance premiums that go up in case of an accident.. Might want to look into that, you'd retain ownership of the vehicle, but it would be used by someone else

 

[Workinonit Farm]

It might not qualify as a charitable deduction (it won't), but it is quite charitable of you.

You too Jo.

:nod: :nod:

I thought the same thing.

Very kind and generous. :)