Donating a Car to Charity – Simple Steps To Follow To Ensure Your Charitable Car Donation Is Done Properly!
June 9, 2010 by admin
Filed under Donate Your Car, Donating Cars To Charity
Simple Steps To Follow To Ensure Your Charitable Car Donation Is Done Properly!
If you are considering donating your car to a charity, there are a few simple steps that should be followed in order to ensure that it is done properly. First and foremost, you should find a charity that will directly accept your automobile donation. For profit agencies can keep almost 50% of the car’s value as payment for their intermediary services. If the car runs, then it should be driven to the charity. This avoids requiring the charity or someone else to pay for a tow truck’s services. If you must use the intermediary services of an agency, then you should choose the agency that donates that greatest percentage of the vehicle’s value to the third charity party.
Unfortunately, the IRS does not preset these monetary amounts; the amount is determined between the charities and the intermediaries. The charity that you intend to be the recipient of your gift should also have their 501 (c) status; this status designates an organization as a public charity. Gifts that are given to organizations of this status are considered tax deductible.
Next, you should ensure that your car is transferred correctly to the charity. The car’s title should be formally signed over to the charity; otherwise, you will be legally responsible for any tickets, accidents, or crimes that the car might be subsequently involved in.
Another step to donating your car is to have the car valued correctly. New legislation, introduced in 2005, prevents a person from claiming their car on their tax deductions if the car is valued at more than $500.00. You must wait until the car has been sold by the charity at auction and you have been provided with a receipt for the exact amount the car was sold for.
If the car is worth more than $500.00, then you will be required to complete IRS Form 8283 and return it to the IRS with your taxes. If the car is not sold at auction and is to be kept and used by the charity, then a person may use the fair market vehicle of their vehicle as a deduction on their taxes. Regardless of which method you employ, you should always receive a receipt from the charity for donating your car.