Car Donation FAQ
If you are seeking to make a contribution to a charity or nonprofit organization, donating your car can be an easy and rewarding option. Most organizations accept vehicle donations and can provide you with a legal receipt for use in making a tax deduction. Familiarize yourself with the donation process, research the receiving organization and know the facts about giving away your vehicle.
Other People Are Reading
-
Tax Deduction
-
If you plan to make a tax deduction for the full value of the vehicle and it is more than $500, you will need to obtain its fair market value. As part of the American Jobs Creation Act of 2004, the IRS limits this value to the gross proceeds of the sale of the vehicle. This means you will need to wait until the car you donated is sold by the organization or it is given to a qualified needy recipient through the organization. By law, the organization must provide an acknowledgment to the donor within 30 days of the sale stating the amount of gross proceeds. Use IRS form 8283 (see References) to make the deduction on your tax filing.
Qualified Organizations
-
Most established charities and nonprofit organizations have the means to accept vehicle donations, but you should verify that they are qualified. Taxpayers can use Publication 78 on the IRS Web site to check that an organization is qualified to receive deductible contributions.
-
Transfer of Car
-
To donate a car, you will need to both legally and physically transfer the car. Many organizations will pick up your vehicle for free. Others have designated drop-off locations. Contact the organization to determine the process and to see whether you face additional expenses.
To legally transfer the title of the vehicle, sign over the car using the official vehicle title document. Verify the correct address of the organization to place on the document. Contact your state's DMV to see whether it requires additional forms to be submitted. Most states require you to remove the license plates from the car, but confirm this with your own state's DMV.
Use of Funds
-
Before you donate your car, research the organization to determine how the money generated from the sale of the vehicle will be used. You can also use Charity Navigator to determine the charity's overall fiscal responsibility. The organization is an independent evaluator that examines the financial health of more than 5,500 of America's largest charities.
-
References
Resources
- Photo Credit car image by Goran Bogicevic from Fotolia.com
