Donating Your Car To Charity The Right Way

Tip #1

If you are looking to get a tax deduction for donating your car to a charity then you must make sure that the charity you plan to use is an IRS approved 501(c)(3) organization. This is an excellent question to ask so you can ensure you not only help out the charity but that you also are eligible to get your tax deduction. You will also need an IRS form 8283 if you car is worth more than $500. And if your car happens to be worth more than $5000 then you will need to have an outside appraisal, proof of donation from the charity (ask for a receipt) and a copy of the title change. I would suggest getting as much documentation from the charity on how much they were able to receive from the sale of your donation. It also worthwhile to call your accountant and get their professional opinion too.

 

Tip #2

If your car or vehicle you plan on donating is worth less than $500 then you can use the fair market value rule. Also, if the charity you plan to donate your car to uses your donation and uses it for charitable work then the fair market rule should apply also. Fair market value can be found with Kelley blue book and other resources that are deemed reliable. Again, check with a tax expert to make sure you are following the IRS rules for donating cars to charities.

Tip #3

When you find a charity you would like to donate your car to make sure you do not leave the assignment of ownership blank. And if the charity you have found asks you to leave this part of the paperwork blank I would suggest you find another place to donate this car. If you do not complete the transfer of ownership you will be held liable for any parking tickets and liable if any crimes may be committed from the use of the vehicle. Also, after you have transferred ownership and title of the car make sure you report it to your state’s department of motor vehicles or licensing division.

Tip #4

Take the time to do this right so that when you do find the right charity to donate your car too everyone will win. I hope you found these tips helpful. Now get out there and donate your car.