How to Donate a Vehicle That Does Not Run
A car that doesn't run may have little or no value, depending on its condition. Donating such a car to charity allows the charitable organization to sell the car for its remaining value. This is a win-win for everyone, because the charity increases its operating income and the donor gets a tax write-off. In addition, the donor avoids having to pay advertising fees or expensive repair costs to get the vehicle up and running.
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Instructions
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Locate a charity that accepts vehicle donations. According to CharityNavigator.org, donors should contact the charity directly to set up a car donation. If a donor opts to use a third party or a middleman to donate a non-working car, the charity may end up receiving 50 percent of the proceeds or less. Dealing with a charity directly ensures it will receive 100 percent of the vehicle proceeds. Furthermore, the car donation must go to a public charity. According to CharityNavigator, the charity must have a 501(C)(3) public charity status for the car donation to be tax deductible by the donor.
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Complete the car donation forms required by the charity. Arrange to have the vehicle picked up. Check with the charity to determine if it has a towing service, or if the donor must cover the towing cost.
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Conduct a final inspection of the vehicle. As mentioned on the Driver Side website, the vehicle doesn't have to be running, but it must be whole and have potential use if you wish to claim the donation as a tax deduction. In other words, car doors and all other parts should be in place. In rare cases, exceptions can be made, but that appears to be out of the ordinary.
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Transfer the vehicle title. Sign the assignment of ownership space on the car donation paperwork. This process properly relinquishes the car from the donor's possession. If the donor fails to transfer the title correctly by signing the assignment of ownership, he will be held liable for anything that happens in regard to the vehicle. For example, the donor may be held liable for parking tickets that occur after donating the car, if the car title isn't transferred properly. Be sure to receive a receipt from the charity.
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Complete the appropriate tax paperwork. The Charity Navigator website explains that if a car has a fair market value of more than $500, the donor's deduction will be determined by the selling price of the vehicle. The charity should send the donor a statement providing the total selling price of the car. If the car donation exceeds $500, the donor must fill out Form 8283 along with her tax return.
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Tips & Warnings
In certain situations the donor may be able to use the fair market value of the car. The fair market value of the car comes into consideration if the car value is less than $500, if the charity opts to keep the vehicle, or if the charity repairs the vehicle before selling it.
