What Information Do I Need to Provide Regarding My Car Donation?

By Justine Depalma

  • Overview

    Donating a car to charity gives the donor a federal tax deduction and the charity either a vehicle or money from the sale of the car. It makes sense to donate a car that cannot be sold since the deduction may be the only way to make money off the vehicle. Many charities work with auctioneers or dealers who take in donated cars and sell them. The charity receives a portion of the sale from the auctioneer.
  • Title

    Donating a car means that you are transferring ownership of the vehicle. The car title is needed to do this. The title will be transferred to either the name of the charity or its auctioneer. Signing the title over to the charity or the auctioneer and filing with the Department of Motor Vehicles transfers ownership.
  • Pictures

    Recent pictures of the donated car can help prove a deduction to the I.R.S. if there is an audit. Pictures should show the condition of the vehicle. A photo of the vehicle identification number plate (usually near the windshield) will be helpful in identifying the vehicle.

  • Appraisal

    I.R.S. rules provide that the deduction is limited to the sales price of the car. If you chose a charity that is going to keep the car for its own use or if the vehicle is worth more than $5,000, then an independent appraisal will be necessary. Used car dealers provide appraisals for a small fee.
  • Thank You Letter

    Charities and their auctioneer/dealers will send a thank-you letter as a receipt for the donation. Thank-you letters help prove the deduction if disputed in an audit. If an auctioneer sold the car for a charity, he will send a letter that includes the amount of the sale. I.R.S. regulations prevent the charity from putting a value on the vehicle donation other than the selling price.
  • Proof that Charity is a 501 (c)(3) Organization

    Car donations to charities are only deductible if the charity is a 501(c)(3) organization. The I.R.S. sends letters of determination to official 501(c)(3) charities. Contact the charity and ask for a copy of the determination letter before you donate your car.
  • © High Speed Ventures 2011