You have probably seen advertisements on television soliciting car donations for charities. Giving your car to charity provides numerous benefits for both the charity and its clients - and for you. The charity will get a valuable asset, which they can either use, or sell to benefit their programs. You get a deduction in your tax return that can be equal to the present market value of the car, or even the amount the charity gets when they sell the car. Depending on the car, that can really be worth more than the amount a car dealer will give you on it as a trade-in, and it is almost certainly more than a scrap dealer will provide you with for the metal.If you do choose to donate your car to a charity, it's essential for you to do some research and to keep meticulous records to ensure that you and the charity get the full value of your donation.
Here is a checklist of things you need to know and do before you donate your car.
Know the Charity
Many charities no longer accept direct car donations because they do not have the resources to take full benefit of them. Some larger charities take direct donations and have a whole department devoted to dealing with the paperwork along with other requirements. Many other charities take car donations by means of third-party donation centers that serve as clearinghouses. Before you donate your vehicle, check to make certain that the charity is a 501 (c) 3 qualified charity. If it's not a 501 (c) 3 organization, you won't be able to deduct your donation from your taxes.
Transfer the Title of the Car To the Charity And Keep A Copy Of The Transfer Papers For Your Records
Some less-than-reputable companies will ask you to let them deal with the particulars of the transfer of title. This could be simpler for the charity, which never really takes possession of the car. They do not actually transfer the title until the car is offered to another party, however this can cause problems for you when you file your taxes. Rather, see to it the title of the car is transferred to the charity to ensure that you will have a record of the donation.
Ask the Charity How They'll Gain Out of your Donation
Charities use donated cars in several other ways, and you will find differences in the tax treatment amongst the ways. It's essential for you to know whether the charity will use the car itself, donate it to a needy family or sell the car at auction. It is also important for you to understand if the charity can make substantial repairs to the car prior to selling it. Again, there are variations in tax treatment.
Take Photos Of The Car and Get an Appraisal of its Value If The Car is Worth More than $5,000
Before you make a donation, establish its value. If it is really worth greater than $5,000, you need to get a professional appraisal to be sure you'll be able to deduct the most value from your taxes. If its value is less than $5,000, you can generally establish its value by checking Kelly Blue Book or current, local classified ads for similar autos in comparable condition.Once you've assured yourself that the charity is reputable and that you simply know the approximate value of your auto, call a charity that takes car donations and find out about their process.
Here is a checklist of things you need to know and do before you donate your car.
Know the Charity
Many charities no longer accept direct car donations because they do not have the resources to take full benefit of them. Some larger charities take direct donations and have a whole department devoted to dealing with the paperwork along with other requirements. Many other charities take car donations by means of third-party donation centers that serve as clearinghouses. Before you donate your vehicle, check to make certain that the charity is a 501 (c) 3 qualified charity. If it's not a 501 (c) 3 organization, you won't be able to deduct your donation from your taxes.
Transfer the Title of the Car To the Charity And Keep A Copy Of The Transfer Papers For Your Records
Some less-than-reputable companies will ask you to let them deal with the particulars of the transfer of title. This could be simpler for the charity, which never really takes possession of the car. They do not actually transfer the title until the car is offered to another party, however this can cause problems for you when you file your taxes. Rather, see to it the title of the car is transferred to the charity to ensure that you will have a record of the donation.
Ask the Charity How They'll Gain Out of your Donation
Charities use donated cars in several other ways, and you will find differences in the tax treatment amongst the ways. It's essential for you to know whether the charity will use the car itself, donate it to a needy family or sell the car at auction. It is also important for you to understand if the charity can make substantial repairs to the car prior to selling it. Again, there are variations in tax treatment.
Take Photos Of The Car and Get an Appraisal of its Value If The Car is Worth More than $5,000
Before you make a donation, establish its value. If it is really worth greater than $5,000, you need to get a professional appraisal to be sure you'll be able to deduct the most value from your taxes. If its value is less than $5,000, you can generally establish its value by checking Kelly Blue Book or current, local classified ads for similar autos in comparable condition.Once you've assured yourself that the charity is reputable and that you simply know the approximate value of your auto, call a charity that takes car donations and find out about their process.
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