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Author: lorenzo2 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121061  
Subject: VITA Blues, II Date: 2/19/2005 8:45 PM
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At our AARP/TCE site last week, fellow came in to have his taxes done. Low income, not especially fluent in English (originally from Haiti). Routine return, then he pulled out papers showing he had donated a car to charity, blue book value around $3K. I tried to explain about standard vs. itemized deductions, but really didn't get through to him very well - again, his English was limited, and my French consists pretty much of asking for a beer and asking for directions to the toilet. He seemed to think he should get the entire $3K back. I finally convinced him that wasn't gonna happen, and he said, "So the guy lied to me?" I said no, I didn't think the charity guy had actually lied, more likely it was just a misunderstanding. He kept coming back to the fact that the fellow had lied, and I eventually gave in and said that well, maybe he did.

Then amazingly enough, another low-income person came in. Couple of W-2s, that's it - then he pulled out paperwork showing he had donated a car to charity, value $1300. He too thought he was getting the whole amount back. This fellow spoke English, so I had some modest success in explaining standard and itemized deductions. But I never did succeed in explaining that deductions are not credits, and that even if he did itemize, the value of the deduction would be more like $130. He finally left and said he'd think about it - I gathered he was going to shop around to see if anyone else could get him his $1300 back. And as he was leaving, he asked me if I could at least fill out the Form 8283 the charity had helpfully given him. After all my explaining, he still seemed to think that he could send that in somewhere, by itself, and get his $1300.

Charities were pushing pretty hard last fall, saying that you had only until year-end to get a tax break via auto donations. It's sad to see that at least a few misunderstood, and believed they would get back full value. (I wonder how hard the charities worked to explain how charitable deductions actually work?) Neither of these fellows got any tax benefit for the donation - they would have been better off selling the cars, even if only for scrap.

Lorenzo, TCE Guy
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