Car Donation FAQ Does it Cost Anything to Donate Your Car? No, it shouldn’t. Most reputable car charities do not charge to accept your donated vehicle. In rare cases, the charity may ask you to pay for towing charges. Beware if organizations ask for fees to donate your vehicle. Does the Car Need to Be Running? No, not always Although many charities accept only cars in good running shape, some accept vehicles needing repair If your car is more than 20 years old, or needs extensive work, it may be more difficult to donate What Happens to the Car After I Donate It? Donated cars are typically used one of the following ways:
- Cars are sold to raise cash
- Cars are given to clients
- Cars are used by charity organization
How is the Vehicle Transported to the Charity? Most offer local drop off locations Some programs will pick up local vehicles Some will tow cars that are not running (and occasionally charge a fee) Can I Use the Donation as a Deduction on My Taxes? Car Donation are Generally Deductable if: Benefiting Charity is a registered 501(c)3 tax-exempt organization (for charity verification see IRS publication 78). Donations to 501(c)4 and other tax-exempt organizations are generally not tax deductible You itemize deductions on your federal tax return Limit deduction to the Fair Market Value of the donated vehicle Document, retain and file proper forms For complete rules see IRS Publication 4303
How Much Can I Deduct?
Deductions of $500 or less: For deductions of $500 or less, you can deduct the gross proceeds from the sale of your vehicle by the charity or the vehicle’s fair market value on the date of the contribution which ever is less. Deductions of more than $500: For deductions of more than $500, you can deduct the gross proceeds from the sale of your vehicle by the charity or the vehicle’s fair market value on the date of the contribution which ever is less. Exceptions to Above for Deductions greater than $500:
- Exception 1 – Vehicle Used or Improved by Organization: If the organization makes “significant intervening use” of or “material improvements” to the vehicle before transferring it and you claim a deduction of more than $500, you can generally deduct the Fair Market Value of the vehicle at the time of the donation*.
- Exception 2 – Vehicle Given or Sold to Needy Individual: If the organization gives the vehicle to a needy individual or sells it “for a price well below fair market value” as part of the organizations charitable purpose and you claim a deduction of more than $500 you can generally deduct the Fair Market Value of the vehicle at the time of the donation*
*If the vehicle’s fair market value at the time of the contribution is more than your cost, you may have to reduce the fair market value claimed for the vehicle – see IRS Publication 4303 – A Donor’s Guide to Vehicle Donations for more details.
What Items Do I Need To Donate My Car?
Items to prepare when you are ready to donate your car:
- The vehicle’s title and lien release
- Keys for the vehicle Vehicle information
- VIN (vehicle identification number)
- Year/Make/Model of vehicle Your social security number (required by the IRS)
What are the Benefits of Car Donation?
Car Donations Provide:
- Funding for non-profit organizations Operational and functional resources for non-profit organizations
- Affordable / free transportation for needy individuals and families
- Educational experience for vehicle maintenance and body shop mentorship and work programs
- Reuse / recycle / repair of vehicles in disrepair
- Reduction in pollution when older vehicles are retired, scrapped Recycle of steel and raw materials from salvaged car parts
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