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Overview
Sometimes an old car, van or boat can be more trouble than it is worth to sell, or you may simply want to avoid the time and effort of disposing of a motor vehicle. Vehicle donations to charity are a good alternative. You put the vehicle to good use, avoid the headaches and can get a tax deduction. There are many national and local charities to choose from that accept vehicle donations. It's wise to know how vehicle donations to charity work before you start as well as how to find a qualified charity.
Documentation
Vehicle donations to charities require that you transfer ownership to the charitable organization. You must have the title to the car properly filled out. In some states, you must have your signature on the title notarized. It's necessary to have the Vehicle Identification Number handy to complete the donation form. You can find the VIN on the title, vehicle registration or proof of insurance. Some states also require proof of registration.
Considerations
For vehicle donations to charities to be tax-deductible, the organization must be qualified under IRS rules. To verify that an organization is qualified, check the current version of IRS Publication 78. You can search or download Publication 78 at irs.gov (link below). The IRS recommends that if you have any questions about a particular charity, call its consumer information number toll-free (1-800-829-1040).
Types
When you are searching for a charity to donate a car or other vehicle, you'll have a choice of both local and national organizations. Among national charities that accept vehicle donations are the National Kidney Foundation (kidney.org) and the American Diabetes Association (diabetes.org). Both use the proceeds to assist patients and fund research and for public-education programs aimed at prevention of health problems. Another national charity is the Order of the Purple Heart (purpleheart.org), which provides assistance to veterans and advocacy in dealing with eligibility issues with Veterans Affairs. Contact your chapter of the United Way to find local charitable organizations that accept car donations.
Procedure
The procedure for donating vehicles to charities is normally quite simple and can usually be done online. You have to provide personal information, the make and model of the car, the VIN and a description of the vehicle's condition. You'll be contacted in a few days to arrange for pickup of the vehicle (free of charge). At that time, you will deliver the title, other required documents and the keys. In some states, you leave the tags on a car. You'll be given a receipt to keep for your records.
Requirements
Under IRS regulations, you are allowed to deduct the full price that the charity gets from the sale of a donated vehicle. If the proceeds are less than $500, you can deduct the fair market value instead, up to $499. The charity is required to provide you with price documentation within 30 days of the time the car is sold. You can get further information from IRS Publications 526 (Charitable Donations) and 561 (Calculating the Value of Donated Property). Both are available in PDF format at irs.gov.
