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Step 1
Find a charity. Look for a charity that supports a cause that really means something to you. Not all charities accept car donations so double check to make sure. (Follow the first link below for a list of charitable organizations in Colorado.)
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Step 2
Do a little research to ensure that the charity is an appropriate tax exempt charity organization [501 (c ) (3)]. You want your donation going to the right place, and you'll need to donate to an appropriately recognized charity for tax deduction purposes. (See Resources below to find properly registered Colorado charities.)
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Step 3
In some cases, a third-party organization who works with charity organizations handles the donation and sale processes. If you use a search engine on donating a car in Colorado, you're likely to get a long list of such organizations. While these companies make it easy to donate, make sure to get information on the fee they charge and how much of your money is going to the charity itself. Don't be afraid to ask questions--it's your generous donation. If the organization simply pays the charity a flat fee for all car donations, you may not even be eligible to receive a tax deduction. For best results, avoid third parties and give directly to a charity.
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Step 4
Contact the charity and set up a pick-up or drop-off time and place. Many charities or third parties will pick the car up; just make sure to determine whether they charge a fee for doing so.
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Step 5
Get the vehicle in proper shape as required for donation and double check that all your personal belongings are cleared out.
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Step 6
You will need to have a clear title, free of any liens. Sign the title over to the specific charity and make a copy for your records. Contact the Colorado Department of Motor Vehicles to report the transition of ownership.
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Step 7
When handing the vehicle over, get a receipt or letter of donation documenting the donation.
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Step 8
Once the vehicle has been sold, you should receive IRS Form 1098 C from the organization that will detail the sale (for sales over $500). You'll need to file this with your tax return to obtain the deduction. You may also need to file Form 8283.
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Step 9
Depending upon the sale price of the vehicle, you may need to get an appraisal (over $5,000) or determine the fair market value through a service such as the Kelley Blue Book for tax purposes.
