Donating Your Vehicle To Charity

By L James Johnson

L James Johnson

Contributing Writer BIO

L. James Johnson joined the automotive industry after winning recognition as a radio & TV journalist and running three thriving, fast-growing small... More

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2,101 views May 17, 2010

Many of us don't want the hassle of selling or trading an older vehicle that isn't worth much anyway. An alternative is donating the vehicle to charity. Choosing to donate your vehicle not only provides money to organizations that are often in desperate need – and hopefully does good work – but you receive a tax write-off. Many charities will accept:

• cars
• trucks
• RVs
• campers
• motorcycles
• boats

Charities may sell your vehicle and use the proceeds to fund their work. Alternatively, if your vehicle is in running order, they may decide to use it in their own programs. An example of the latter is the American Family Charity that actually provides vehicles to families in need.

The Better Business Bureau estimates that up to 10,000 vehicles are donated to charities in large urban areas each year. The sale of these vehicles results in $4 to $5 million being added to the charities’ coffers. This means that the average vehicle donation results in $400 to $500 going to the charities before the expense of processing the vehicle prior to sale. 

Most charities will pick up your vehicle at no cost to you. This is particularly useful if the vehicle is not in running order or hasn't passed its smog or emissions test.  Don't have the title? That won't matter in most circumstances. However, check with the specific charity that you are considering.

Tax Deduction!

When you donate your vehicle you not only help those in need, but you sidestep the hassle of selling a clunker privately. You also have the opportunity to keep more money in your pocket by paying the government less tax. Here’s how it works:

• Generally, if the charity sells your vehicle you receive a federal tax deduction limited to the amount the charity received from its sale. The charity will provide a receipt.

• The only way you can deduct your charitable contribution is if you itemize your deductions on Schedule A of Form 1040 on your federal tax return.

• There are specific requirements if the vehicle sells for more than $500, with more requirements if the vehicle sells for more than $5,000. See the IRS guide below for details.

• If the charity does not sell your vehicle, deciding instead to put it to use in its program, then different rules apply for valuing your deduction. See the IRS guide below for those details.

The IRS has a free guide that can help you through the process of donating your vehicle to charity. This PDF download is short and easy to understand - A Donor's Guide To Vehicle Donations.

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L. James Johnson's new book, HELP! I Gotta Sell My Car NOW! New Rules for Selling Your Vehicle Online! is available for download at BayAreaCarGuy.com. You can also download his FREE report, The 8 Biggest Mistakes Used Car Buyers Make & How to Avoid Them!

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