Top Tips for Donating a Car to Charity - Donate Cars

A charity that uses a given vehicle for the transportation or transportation of goods obviously benefits directly from such a donation. However, in many cases donations of cars will be sold in bulk, either by the charity itself or by a dealer to raise funds for the charity. In the case of a dealer, the charity usually receives a fixed fee per car, sometimes as little as $ 45 per car.

Listed below are tips for donors who wish to donate a car to charity. Keep in mind that the donor's tax deductions for car donations may be limited to the price at which the charity sold the car.

• To receive the maximum tax deduction on your car donation, and to receive satisfaction that the total value of the car benefits a charitable purpose, give it to a charity that will use the vehicle in its operations or give it to a charity person in need . Otherwise, your tax deduction will not be based on fair market value, but will be limited to the amount of money the charity receives from the sale of your car. If the charity you donate sells the vehicle, ask what percentage of the product is received.

• Ask if the charity accepts car donations directly, without calling on a third party. If possible, drive the vehicle to the charity instead of using a towing or pickup service. This will allow the charity to keep the full amount of any proceeds from the sale of the car.

• Make sure the charity is eligible to receive tax-deductible contributions. Ask for a copy for your records of the IRS's determination letter from the organization that verifies its tax-exempt status.

• Make sure to get a receipt from the charity for your car donation.

• Be aware that non-monetary donations are one of the most common triggers for an audit by the IRS, so you will need to document the value of the car and keep records of it.

• If the car is worth more than $ 500, the donor must complete section A of IRS Form 8283 and attach it to his tax return. Donors are required to file a written acknowledgment of the charity with their tax return. If the charity sells the car, the charity must provide the donor with a statement that the car was sold at arm's length between the unrelated parties and the sale price of the car within 30 days. In this case, the tax deductions of the donor will be limited to the total amount for which the charity sold the car. If the charity does not sell the car, it must provide the donor with a receipt within 30 days of the contribution. The charity may also be required to provide a certification to the donor indicating how it plans to use or improve the car and stating that it promises not to sell or transfer the car. Penalties are imposed on charities that provide fraudulent charges to donors.

• If the car is worth $ 5,000 or more, an independent assessment is required. The donor must also complete Section B of Form 8283. For cars under $ 5,000, use the Kelley Blue Book, the Hearst Black Book, or a guide from the National Auto Dealers Association (NADA) to determine the market value. Make sure you use the correct number for the date, mileage and condition of your car. Choosing the highest figure for your car model and the year without taking into account other factors can not pass the rally with the IRS.

• Take pictures of the car and save receipts for new tires or other upgrades to check their value.

• Remember, it is the donor, not the charity, who is obliged to evaluate the car and who will pay the penalties if an IRS challenge finds your figure inaccurate.

For more information on donating a vehicle, check out the IRS guide to car donations here.