Donating Your Automobile
to the Kemp Auto Museum
We Are a Foundation
We need you support. Our ability to fulfill our educational mission depends directly upon the generosity of our supporters and donors. Community events, visiting exhibitions and our educational programs for St. Louis area schools, adults and seniors would not be possible without this support from car enthusiasts. For collectors, the Kemp Auto Museum is the perfect partner when considering estate planning and charitable objectives.
Fortunately, federal tax law provides a few incentives for donating your vehicle or collection. Here are a few general examples of how a contribution might work:
If your estate exceeds the IRS exemption threshold, you can realize a saving in tax liability that meets or exceeds what you would eventually net by selling your car(s) at full market value! This is especially true if you add in typical selling costs. See inset example below. Estate planning has even more benefits:
- Your family does not have to find a buyer for your car,
- The risk of someone taking advantage of your estate is eliminated because you will get fair market value,
- There are no commissions to be paid,
- You get to deduct the market value of the car as a basis. Most charities can only allow the cost basis of your donation,
- No repairs, clean-up or other preparation would need to be made by the estate,
- Your estate does not have to find a place to store your car(s) until they are sold,
- Donors are recognized in perpetuity with personal information about them – possiby including a portrait – etched in glass in the Kemp Auto Museum Donor Wall,
- Nothing is left to chance and you can relax knowing that you have taken responsible care of your automobile collection,
- You can know that your donation is going to help educate others and help grow the museum into world-class status.
Let’s assume you have a vehicle that cost you $10,000 many years ago and today it is worth $100,000. The law allows for a current income tax deduction at fair market value as of the date of contribution, subject to some limitations. In addition, this contribution removes the asset from your estate. If your estate is above the exemption threshold, you’ve saved as much as $45,000 in estate taxes. The result? The total economic benefit of your $10,000 investment could be as high as $80,000 in tax savings.
The tax law provides for the ability to “partially” donate a vehicle. You let the Museum display and care for your vehicle while still retaining the right to use it on occasion. The rules for this approach are complex and must be followed carefully, so good tax advice is essential when considering this option.
Donating to The Kemp Foundation
Donating your car to the Kemp Auto Museum is a great option to consider. Effectively plan to get the most value from your collection, while at the same time, minimizing the work, worry, and stress on your family members. As you can see, there are several ways to donate. This list is far from comprehensive and the Museum staff would be happy to work with you and your advisors to determine to best method for you. Please complete the form to the right to contact one of our staff members.
Everyone’s financial situation is different and the tax consequences will vary significantly, depending upon your facts and circumstances. Professional legal and tax counsel should be obtained before making any contribution.
Why sell when you can donate?
If your estate is $500,000 over the exemption threshold and you have an automobile that has a market value of $100,000 and your estate is fortunate enough to sell the car on the open market for this amount, the estate would receive $50,000 net cash after taxes (assuming the estate tax is 50%) and $50,000 is paid to the IRS. If your estate donates the car, the taxable estate is reduced by $100,000 and your tax burden is reduced by $50,000. The after tax estate values are the same!
Call Rodger Van Ness at 636-537-1718
for more information.