Donating
a car is a way to support a charitable organization while still reaping
an economic benefit through a tax deduction. All donors should be aware
that tax deductions for used automobiles, boats or airplanes are
available only to those individuals who donate to a qualified charity
and who itemize deductions on their tax returns. Following are some tips
to consider when deciding whether to donate your car to charity.
Do ask the charity plenty of questions. Find out
what the organization's mission is and how your donation will help it.
Ask if your donation can go to a particular program or service that
interests you or whether it must go only into the charity's general
fund. Do not donate to an organization that avoids talking about its
charitable purpose or refuses to send you information.
Do ask what the charity will do with your car.
Some charities refurbish cars and give them to people in need. Some
technical schools use cars in their auto shop programs. Other
organizations simply resell the car or sell its parts and use the
proceeds for their charitable purposes.
Do ask if the charity handles all aspects of your donation.
Many charities contract with for-profit companies to handle all the
details of motor vehicle donations. If this is the case, ask how the
money from your car donation is split between your charity and the
for-profit company.
Do have your motor vehicle appraised by a qualified professional appraiser if it is worth more than $5,000.
On the back side of your title, you should assign the title to the
charity or an authorized agent of the charity, enter the correct mileage
from the odometer, and sign and date the form. Be sure to make and keep
a copy of both sides of your title.
Do maintain a personal record of your donation. Items that should be included in your record include:
- The written contemporaneous acknowledgment from the charity;
- The name and address of the organization to which you contributed;
- The date and place where your vehicle was picked up;
- A reasonably detailed description of the donated car or a photograph of the car;
- The fair market value of the car at the time of the contribution and how that value was calculated;
- A signed copy of the appraisal, if the motor vehicle was appraised;
- Any terms or conditions attached to the car donation;
- How you obtained the car (by purchase, gift, inheritance, etc.) and the date; and
- A copy of your title, registration, and any receipts you are given by the tow company or the charity.
