Donate A Car To Charity Questions
Donate a car to charity? Is it really as easy as it sounds? Well, if you follow the guidelines below it can be a beneficial transaction for both parties.
- First, find a worthy charity. If your favorite doesn’t take donations of this type, look at the BBB for more ideas. Make sure that the charity is reputable.
- Second, avoid the middleman. Organizations that offer to help you donate a car to charity often take a percentage of the profit from the car. Sometimes up to 90 percent! To assure that the charity of your choice gets as much as possible from the donation, bring the car to them yourself. If you just don’t have the time, make sure to find out how much the charity is going to get from the transaction. Some only pay a flat rate – like $100 – while others may offer a percentage of the sale (50%).
- Third, make sure that the place you are donating your vehicle to is a IRS-approved 501(c) (3) organization. Churches, synagogue, mosque, and temples usually qualify. You can also search the IRS website for publication 78 to find other non-profit organizations that may qualify.
- Fourth, make sure to legally re-title the vehicle to charity so you don’t end up with the fall out from someone’s bad decisions like a parking ticket. Never leave the ownership space blank!
- Fifth, when you donate a car to charity, make sure to keep a paper trail. If you car is worth more than $5,000 you will want to get an outside appraisal. Also, get proof of the donation, like a receipt from the charity and a copy of the title change. If the car is worth more than $500, you’ll also have report it on your tax return (Form 8283). Your estimate of what your car is worth, is not going to be good enough for the IRS, they will want to see evidence of how much the charity got for it. Get a receipt from the charity showing how much money is made from the vehicle.
- Finally, you won’t need evidence of the sales price if the charity decides to keep the vehicle to use for charitable work. Also, if the car is worth less than $500; in these cases the value you find on Kelley Blue Book should be sufficient.
Donating a car to a charity can be a great idea, and certainly one of the largest donations you may ever make. Make sure to do this right, and it can be one of the best decisions as well.
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