You have probably seen ads on television soliciting car donations for charities. Giving your vehicle to charity provides numerous advantages for both the charity and its customers - and for you. The charity gets a valuable asset, which they can either use, or sell to benefit their programs. You get a deduction on your tax return that could be equal to the present market value of the car, or the amount that the charity receives when they sell the car. Based on the car, that can actually be worth more than the amount a car dealer will give you on it as a trade-in, and it's almost certainly more than a scrap dealer will give you for the metal.If you do choose to donate your car to a charity, it's essential for you to complete some research and to keep careful records to make sure that you and the charity get the full value of your donation.
Here's 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 advantage of them. A few larger charities take direct donations and have an entire department dedicated to dealing with the paperwork along with other requirements. Numerous other charities accept car donations by means of third-party donation centers that serve as clearinghouses. Before you donate your vehicle, check to make sure the charity is a 501 (c) 3 qualified charity. If it is not a 501 (c) 3 organization, you will not 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 handle the details 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 till the car is sold to another party, however this could cause problems for you when you file your taxes. Instead, see to it that the title of the car is transferred to the charity so that you will have a record of the donation.
Ask the Charity How They'll Benefit Out of your Donation
Charities use donated cars in several other ways, and you will find differences in the tax treatment among 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's also essential for you to know if the charity can make significant repairs to the automobile before selling it. Once more, there are variations in tax treatment.
Take Pictures Of The Car and Get an Appraisal of its Value If The Car is Worth More than $5,000
Before you make a donation, identify its value. If it's really worth more than $5,000, you should get a professional appraisal to be sure you will 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 comparable vehicles in similar condition.Once you've certain yourself the charity is reputable and that you know the approximate value of your auto, call a charity that accepts car donations and find out about their process.
Here's 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 advantage of them. A few larger charities take direct donations and have an entire department dedicated to dealing with the paperwork along with other requirements. Numerous other charities accept car donations by means of third-party donation centers that serve as clearinghouses. Before you donate your vehicle, check to make sure the charity is a 501 (c) 3 qualified charity. If it is not a 501 (c) 3 organization, you will not 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 handle the details 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 till the car is sold to another party, however this could cause problems for you when you file your taxes. Instead, see to it that the title of the car is transferred to the charity so that you will have a record of the donation.
Ask the Charity How They'll Benefit Out of your Donation
Charities use donated cars in several other ways, and you will find differences in the tax treatment among 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's also essential for you to know if the charity can make significant repairs to the automobile before selling it. Once more, there are variations in tax treatment.
Take Pictures Of The Car and Get an Appraisal of its Value If The Car is Worth More than $5,000
Before you make a donation, identify its value. If it's really worth more than $5,000, you should get a professional appraisal to be sure you will 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 comparable vehicles in similar condition.Once you've certain yourself the charity is reputable and that you know the approximate value of your auto, call a charity that accepts car donations and find out about their process.
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