Donate Your Car - How Car Donation Works

Donating your old car can save you money and help a well-deserving charity

How does it work?
You donate your used vehicle to a legitimate charity or not-for-profit organization that either sells the vehicle or uses it for their own purposes, and you receive a tax deduction and the pleasure of knowing you helped someone in need.

Who can I donate to?
You can donate to any organization that is an IRS approved 501(c)3 charity, which may also include qualified educational and religious organizations. Many churches and other religious groups are not required to be approved, but are neverthless qualifed.

If you have a specific organization in mind, it will be able to tell you if they are eligible to receive tax-deductible charitable donations.

If you want to donate and need to locate an organization, search on the IRS's Cumlative List of Organizations. Many organizations have web sites which make it easy to donate your car online.

What can I donate?
You can donate any type of motor vehicle that is normally titled in your state. This would include cars, trucks, motorcycles, scooters, and RVs. Some will also accept non-titled vehicles such as snowmobiles, ATVs, and gocarts.

Does the vehicle have to be in running condition?
In most cases, no. Most charitable organizations will accept any vehicle that is worth more than the cost of picking it up and towing it.

Must I have the vehicle title?
In most cases, yes. You turn over your title just as if you were selling the vehicle. In most states, this means filling out the title transfer form that is usually on the back of the title itself.

What must the organization do in acknowledgement of my contribution?
They must provide you with a receipt indicating they have received or picked up your vehicle. They are also required to send you a receipt showing how much money they received when the vehicle was sold. This is the amount you'll be able to deduct on your Federal and State tax returns.

What if the organization is in another city or state?
Many organizations can arrange for pick-up services, at no cost to you. The value of the vehicle should exceed the cost of pick-up or towing.

What exactly is the benefit of donating a car?
It depends on the value of the car and your current Federal tax category — the percentage of your income that is taxed. State tax deductions may also apply.

If the value of the vehicle is less than $500, you can deduct it without further proof of value, according to IRS rules. If $500 or more, you must use the receipt you receive from the charity to establish the vehicle's value — and the amount of your deduction.

If the vehicle is used by the charity itself, or if the charity makes siginificant improvements and repairs to the vehicle before it's sold, you can deduct fair market value. This cannot exceed the value found in used car pricing guides such as Kelley Blue Book.

Summary
Getting a tax write-off is only one benefit of donating a car to charity. The other, possibly more important, benefit is that it provides charitable organizations with funds to help the needy.

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