How to Donate a Car to Charity

May 18, 2018 11:38 pm23 commentsViews: 142

First, many charities will take any vehicle–cars, motorcycles, even boats. Some will even take vehicles that don’t run and either fix them or sell them for parts. The charity will then sell the vehicles at auction to raise money. Occasionally a vehicle will be used by the organization if it’s in good condition. Be aware, some charities sell for parts only, so if a car is in good running condition call first and find out if the car will be auctioned or sold for parts.

There are basically three steps to donating a vehicle to charity: find a reputable organization, transfer the vehicle’s title, and follow up to make sure a receipt is issued after the vehicle is sold. After that, it’s simply a matter of filing IRS Form 8283 and getting a deduction at tax time.

Before donating, call the organization and make sure the vehicle is going straight to them. Some charities take vehicle donations through middle men: for-profit companies that pick up a vehicle and charge charities 50 to 90% of the vehicle’s value as a “service fee.”

Make sure the charity is a 501 (c)(3). Some organizations are 501 (c)(4)–that means the organization can lobby the government. 501 (c)(4) donations are not tax deductible. Make sure to verify the charity is a 501 (c)(3) to qualify for a tax deduction.

Don’t leave the title blank when the vehicle is picked up. Some charities ask for a blank title so the auction winner can register the car directly. It saves the charity from having to pay registration fees. But a blank title means the donor is still responsible for the vehicle until a new owner registers it. It’s better to sign the title directly to the charity.

After the car is sold, the charity will send a receipt for the exact amount the vehicle was sold for. That’s the amount the IRS will accept as a tax deduction.

At tax time, file IRS Form 8283 to claim the deduction and hold on to the receipt.

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