Best Ways to Donate Cars

By Stephanie Ewell

  • Overview

    Want to donate a car to charity? The process is easier than you might think and if done properly will give you a nice deduction come tax time. There are many options available when donating a car. Here are a few simple steps to determine the best way.
    • Step 1

      Determine the value of the vehicle you wish to donate. The IRS allows a tax deduction of the value of your vehicle up to $500; if the value is more than $500, you must get a receipt from the organization. If the charity places the vehicle in service, you may deduct its fair market value.
    • Step 2

      Choose a charity. There are many options available when donating to charitable causes. Give to your local church or use an on-line service and choose from environmental issues, education, arts, animals, human rights, sports, cancer, children or homelessness.
    • Step 3

      Check the IRS status under Publication 78 to ensure it has classified the charity as a 501(c)(3) non-profit charitable organization.
    • Step 4

      Call the charity to discuss delivery options. Some will have the vehicle towed away by a professionally licensed, bonded and insured towing company, while others will request that you arrange delivery.
    • Skill: Easy
    • Tip: Donating to a local organization is the best option when the value of the vehicle is $500 or below. This avoids high transportation costs offsetting potential profits.
    • Tip: If the value were between $500 and $2000, the best option would be donating to an online organization that will provide free towing to the donor.
    • Tip: When the vehicles value is $2000 or higher, the best option is to sell the vehicle and donate the proceeds.

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