You have most likely seen ads on television soliciting car donations for charities. Giving your vehicle to charity provides many advantages for both the charity and its customers – and for you. The charity gets a precious asset, which they can either use, or sell to benefit their programs. You get a deduction on your tax return that can be equal to the present market value of the car, or even the amount the charity gets when they sell the car. Based on the car, that can really be worth more than the amount a car dealer will give you on it as a trade-in, and it is almost certainly more than a scrap dealer will provide you with for the metal.If you do choose to donate your vehicle to a charity, it’s essential for you to complete some research and to keep meticulous records to make sure that you and the charity get the full value of your donation.
Here is a checklist of things you should know and do before you donate your car.
Know the Charity
Many charities no longer take direct car donations because they don’t have the resources to take full advantage of them. A few bigger charities take direct donations and also have an entire department dedicated to dealing with the paperwork along with other requirements. Numerous other charities take car donations through third-party donation centers that serve as clearinghouses. Before you donate your vehicle, check to make certain 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 Duplicate 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 can be simpler for the charity, which never actually takes possession of the car. They do not actually transfer the title till the car is offered to another party, but this could result in problems for you when you file your taxes. Instead, ensure that the title of the car is transferred to the charity so that you will have a record of the donation.
Inquire the Charity How They’ll Gain From Your Donation
Charities use donated cars in several different ways, and there are differences in the tax treatment amongst 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 is also important for you to understand if the charity can make significant repairs to the car before selling it. Once more, you will find variations in tax treatment.
Take Photos Of The Car and Get an Appraisal of its Value If The Car is Worth More than $5,000
Before you make a donation, establish its value. If it’s worth greater than $5,000, you need to get a professional appraisal to be sure you’ll be able to deduct the most value from your taxes. If its value is less than $5,000, you can usually establish its value by checking Kelly Blue Book or current, local classified advertisements for comparable autos in similar condition.As soon as you’ve certain yourself the charity is reputable and that you simply know the approximate worth of your auto, call a charity that takes car donations and learn about their procedure.