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Overview
You need to figure a way to dispose of your old car since you have bought a new one. You'll receive only a fraction of the price it is worth if you trade it in. Or you can sell it yourself, but the expense of advertising and readying it for sale will cut into the proceeds. To avoid the hassle and uncertainty, and if you live in Virginia, you can donate it to a charity, something many residents of that state do every year.
Significance
Many charities throughout Virginia have automobile donation programs and most of them will gladly pick up your car, regardless of its condition. Some have car lots where they will sell your car, and many others sell the cars at auction. Still others are for-profit processing companies that sell the cars then they distribute the proceeds, after taking its commission of about 20 percent, to a charity of your choice.
Considerations
Choose a charity that performs a service in which you sincerely believe. In Virginia, there are hundreds of automobile donation programs run by charities that perform valuable services to their communities, including National Public Radio station, WCVE, that serves Richmond and its surrounding areas. Others include the Red Cross and the Salvation Army, not to mention churches and others who depend on vehicle donations to meet their budgets. Catholic Charities in Arlington, Virginia has a unique program that attracts automobiles that run and make them available to the elderly, poor and disabled to help them get to their jobs.
Function
Before 2005, you only had to estimate the value of your car that you gave to charity and take that as a deduction on your income tax returns. But since people were declaring amounts in excess of what their cars were worth, now you are limited to $500, or what the car actually sold for by the charity. To deduct more than $500, you need written verification from the charity of the sale. Since that change went into effect, charities have been receiving about a third fewer cars than they did before.
Identification
There are two things to consider before you give your car to a charity in Virginia. First, while whatever tax deduction you receive from your donation is valuable, remember that the primary reason for the gift is so the charity can continue doing good works in your community. Second, if possible, be sure that your choice of charity has its own car donation program, because it will keep more dollars from your donation since it will not have to pay a third party.
Warning
Some charities in Virginia may ask you to sign over your automobile, in blank, to facilitate the transaction by not making them re-title your car. Unfortunately, you could be responsible for crimes that are later committed, or for traffic tickets, after you have long forgotten your gift to the charity. If a charity tries to convince you to do this, pick another charity.
Potential
Donating your car to the charity in Virginia offers an opportunity for you to make a real difference in the lives of people in the state who are less fortunate than you. You receive a tax deduction, free towing of a car, and a sense of satisfaction knowing that you have contributed to the betterment of society in Virginia. That is an example of a win-win proposition that each of us should consider.
