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How Do I Donate A Car to Charity?


 

2007 Ford Fusion used car

When your car has reached the end of its useful life to you, or you are feeling magnanimous and want to provide a vehicle that may benefit someone in need, you may want to consider donating it. But how do you donate a car to charity? Is it a complicated process? What’s involved? Here are some answers.

Do your homework

Your vehicle is an investment that you don’t want to just toss aside. While you may have very good intentions when you decide to donate it, not every website or organization claiming to take your car off your hands, give you a tax deduction, and even pick it up to avoid that hassle is on the up-and-up.

  • Avoid middlemen. Experts say the best bet is to avoid middlemen of for-profit intermediary organizations and go straight to the charity you admire. The reason to avoid the middlemen is that they typically keep from 50 to 90 percent of the value of the vehicle, thus severely shorting the charity you’re hoping to help out.
  • Finding a worthy charity is easier if you check the Charity Navigator or do a search of a particular charity’s records online at this Better Business Bureau site.
  • Make sure of the charity’s status. In order for your donation to be tax-deductible, the charity you’re donating your vehicle to has to be a an IRS-approved 501(c)(3) organization. How do you find this out? Go to the Internal Revenue Service website and type in “Publication 78” or “78” to do a search for qualifying non-profit organizations.

Make the delivery in-person

Unless you really are in a bind, it’s best to drop off the vehicle you intend to donate in person. That saves the charity the expense of arranging to have it transported, thus maximizing the value of the donation to the charity. While you are delivering the vehicle to the charity, use caution. Make sure you re-title it to the charity or organization, reporting the transfer to your state Department of Motor Vehicles or licensing.

Know the value of your donation

Your estimate of what your car is worth won’t cut it with the IRS as a tax deduction. If it’s worth more than $500, the IRS will want to see evidence of what the charity got for it. You’ll need to obtain a receipt from the charity after they’ve sold your donated vehicle.

If your car is worth more than $500, you’ll need to attach IRS form 8283 to your return. If it’s worth more than $5,000, an outside appraisal is required, as well as proof of the donation (a receipt from the charity), and a copy of the vehicle’s change of title.

If, however, the charity keeps the vehicle or uses it in their work – or the car is worth less than $500--you won’t need evidence of a sales price. In this case, your best bet is to use a fair market value that you report on your tax return. To find the fair market value, use listings for vehicles similar to yours on sites such as Kelley Blue Book.

It may seem like a lot of work, but if you’ve made the decision to donate a car to charity, the steps you take to do so will be well worth it.

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