From tax breaks to supporting those in need, donating machinery may be a great option for your business.
Did you know you can donate your old heavy equipment, helping a charity while receiving a tax break?
Heavy equipment is built to last, especially when it comes to the extensive product line offered by Caterpillar®. The long life of your equipment makes it useful across various types of construction projects for many years. Because of its longevity, you may find it's time for your company to move on from a specific piece of heavy equipment before its useful life has ended.
While you can attempt to sell used equipment, there's another option that can take a lot of the burden off your hands and may provide a tax break. Let's look at your options for donating old equipment and how it can help your business.
When should you donate your heavy equipment?
This question is easy to answer in general but requires that you have a deep understanding of your company's specific position to make the right choice. If you have a piece of equipment that is still operational but no longer has a place at your company, it's probably time to donate it. You should make sure that, in a situation where you're planning a one-for-one swap, your new piece of leased, financed or purchased equipment is physically in your possession and ready for use before making a donation. If you give your old equipment to charity before getting your new piece of machinery in place, you might run into problems completing jobs on time and maintaining positive relationships with clients.
What are the benefits of donating heavy equipment?
While the specifics will vary in each instance, your donation may earn you a write-off that can help lessen the financial burden when taxes are due, as Cars2Charities pointed out. Donating equipment can also save you the time and potential cost associated with disposing of heavy equipment.
Selling equipment might be possible, and could be the best choice for your business, but this involves the time-consuming process of coordinating the sale or working through an auction house or similar reseller. Because your equipment is likely old and has obvious signs wear and tear, it may not bring in much (if any) profit, especially after all the fees and other charges associated with the sale. When you donate, a dependable charity or middleman business will typically offer to pick up the equipment and haul it away. That said, all you have to do is make sure the nonprofit or business is legitimate, coordinate the initial pickup, and handle the some of the paperwork afterward.
How to donate heavy equipment?
There are many charities that will accept heavy equipment donations. Your old equipment can easily benefit a good cause even though car, RV, and boat donations are more popular items donated.
The most important thing to do is to validate the legitimacy of the organization or organizations to choose to be the recipient of your donation. Certain charities that have vehicle donation programs, like the ASPCA, accept vehicles and have well-established reputations. Other, lesser-known charities, may require some research. You look up the charity you have in mind on websites like Charity Navigator or GuideStar. For businesses that provide this service to charities - which is likely but not always what you're dealing with if the company isn't listed as a charitable organization - it's worth getting in touch and asking for references and other supporting information before you make a decision.