You might have an old car or vehicle, which you don’t use very often, just sitting on your property or on the street. A car donation that is made to a most charities greatly benefits both the charity and the car donor. To answer a common question, in most cases a donated car or vehicle doesn’t have to run but it should be towable. And your vehicle must have all four tires inflated for them to accept it.
If the charity you’re considering doesn’t appear to welcome your questions and doesn’t provide good answers about where the proceeds from donations will go then you may want to think about making your car donation to a different charity.
You want to locate your title to the car before you call in your donation. Once you have the forms from the charity just fill them out and have them handy for the driver when he comes to tow the car or vehicle. In the new tax law, regarding the fair market value section, there are some exceptions, for example, you can base your deduction on the fair market value of the car or vehicle if the charity sells it to someone in need at a discounted price or if the charity uses the car as part of its charitable plan instead of selling it.
And if you itemize your income tax return then a vehicle donation is allowed. Also, if your car is running, think about dropping it off yourself with the charity to save them from paying for towing costs.
Cars are usually donated to the needy recipients directly or they are sold and the money is given away as part of the charities function. Vehicles that are not being used make very good donations, allowing people in great need to have a dependable means of transportation. In wear and tear, minor repairs and breakdowns, a vehicle owner could spend at least $3000 a year.
There are similar charitable donation laws in all other countries. Charities will usually provide you with a release of liability when they pick up your vehicle or you take it in, and after the car is sold, they provide you with a tax-deduction form that explains exactly much they received for it. Vehicles that need repair can be accepted provided the vehicle is fixable for less than what it would sell for.
One of the good exceptions to the new IRS tax regulations allows donors to still deduct the fair market value of their vehicle, provided the charity does improve the vehicle materially. The “blue book” guides are used to show the average resale prices based on the model and year of your car or vehicle. The charitable organization uses any profit they receive from your vehicle to help fund their specific causes.
Regardless of the tax laws, it’s a good idea to protect yourself by having good insurance coverage on your vehicle right up until it is donated. Donating will eliminate the need of paying for advertising for you vehicle, there’s no loss of privacy and possible security risk from potential buyers who answer your ads and no need to pay for vehicle registration, insurance, and minor or major repairs to keep your car in running condition while you look for a buyer. Some charities that run their own donation program instead of hiring a car donation program broker or middleman are discriminating about which vehicles they will accept, repair and materially improve. They generally sell most of the vehicles at retail prices.
For the states that require getting smog or safety inspection certificates, you can donate your vehicle without any of these documents. In some cases charitable car donors can still claim the fair market value for their vehicle. Typically the vehicle is marketed by the charity and sold to a buyer in who is in need of a good used vehicle.
In the past you could deduct the fair market value of the car at the time of the deduction – but not any more. Charities look at car donations from both the point of view of the donor of the car, and themselves as the charity receiving it.
Picking the best charity for your car donation can be very overwhelming and you want to make sure your choice is the best choice for you. Major charity car donation programs include: the Salvation Army, the Purple Heart Car Donation Program and the Jewish Car Donation Program. So go ahead and donate your car, truck, boat, RV, motorcycle or even your aircraft today and enjoy a nice vehicle donation tax deduction on your next income tax return.