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The Road Map to Car Donation


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Donating a car is a great way to get rid of an old vehicle and contribute to a good cause, but it's not as simple as handing over the keys to the first organization you find. Find out how you can make the best possible choice when it comes to donating your car with this guide by Goodwill Car Donation.

Published in: Automotive
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The Road Map to Car Donation

  1. 1. THE ROAD MAP TO CAR DONATION Donating a car to charity might sound like an appealing way to be rid of a burden and contribute to a worthy cause. However, the process isn’t as simple as handing over the keys after calling the first number that you see or hear advertised. This guide will help you make the best possible choice when you donate a car and create the greatest benefits for you and the cause you choose to support. ✔✔ Make sure the car donation program you want to donate to is registered and tax-exempt. Your state’s attorney general’s office will have this information. ✔✔ In order for your contribution to be tax-deductible, the charity must be registered with the IRS as a 501(c)(3) nonprofit. ✔✔ Beware of organizations offering vacations or other giveaways in return for a vehicle donation. Not only will accepting something in exchange for your vehicle possibly invalidate your tax deduction, but this also could be an indication that the organization is not reputable. FINDING A REPUTABLE CHARITY GETTING YOUR TAX DEDUCTION OTHER TIPS FOR VEHICLE DONATION ✔✔ To claim your tax deduction, you must itemize your deductions on your tax return. You must also have documentation. The nonprofit should give you written acknowledgment that includes your name, a description of the vehicle, the VIN (vehicle identification number), the donation date, the selling price of your vehicle, and a statement that no goods or services were received in return for your donation. ✔✔ The charitable deduction applies for the tax year during which you submitted your donation. ✔✔ If your vehicle sells for less than $500, you can claim the selling price or the vehicle’s fair market value up to $500. Remember to keep the written acknowledgement. Calculate the fair market value by using a reputable used-car price guide and/or checking prices online for vehicles of the same make, model, year and condition. ✔✔ If your vehicle sells for more than $500, you can claim only the exact amount for which it sold, even if the fair market value is greater than the selling price. In addition, you must attach the nonprofit’s written acknowledgement and/or completed Tax Form 1098-C (Contributions of Motor Vehicles, Boats, and Airplanes) to your tax return. Plus, you are required to complete Section A of Tax Form 8283 (Non-cash Charitable Contributions). ✔✔ If your vehicle sells for greater than $5,000, you can claim only the exact amount for which it sold. You must attach completed Section B of Tax Form 8283 (Non-cash Charitable Contributions). You may be required to obtain a written appraisal of your vehicle, as well. ✔✔ For more information, it is recommended that you consult a tax adviser or the IRS for more specific information about charitable contributions. ✔✔ In most states, you are required to have a clear title to the vehicle - free of liens. Many nonprofits can help you get a lien release if your title shows old liens. ✔✔ Remember to remove your license plates and any personal property inside the vehicle before it is picked up. Contact your local municipality for directions on what to do with these old plates. ✔✔ Remember to cancel registration and/or insurance on your vehicle after your vehicle is donated. ✔✔ Remember to keep all paperwork given to you from the nonprofit as you will need these documents to get your tax deduction.