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Things to Know About Donating a Car to Charity

Things to Know About Donating a Car to Charity

Several charities run a car donation program as a means of raising support for their organization. The vehicles received through these donation programs are not generally used for the charities themselves, but rather sold at auctions or privately by the charity.
Donating your vehicle to a charity can be a way to help both you and the charity. You can get a tax deduction for your donation, and the charity, obviously, benefits from the funds they will receive from the sale of your vehicle. Below are a few tips and things you want to know about donating a vehicle to charity:

Things to Know About Donating a Car to Charity

If you are hoping to use your contribution for a write-off, do your homework. It is the donor's responsibility to accurately determine the value of the vehicle. In-kind donations tend to raise a red flag with the IRS, but if you have properly appraised the vehicle and filed the proper IRS forms you will have nothing to worry about.

Be sure that the charity you are considering donating to is eligible to receive tax-deductible donations. You also want to verify that they will provide you with a receipt for your contribution. You can ask the charity to send you a copy of their IRS letter of determination to keep for your records.

If the vehicle you are donating is worth more than $500 you will need to complete section A of IRS Form 8283 and attach it with your tax return. You must also include in with your tax return a written letter of acknowledgment from the receiving charity. If the charity does not sell the car they must you with a receipt. They can also state how they plan to use or improve the vehicle. If the charity has sold the vehicle before 30 days, they should provide you with certification that the vehicle was sold by an unrelated party and the sale price of the vehicle. If the case of a sale your tax deduction will be limited to the amount the charity sold the car for.

know about donating

If you believe your donated vehicle to be valued at $5,000 or more you will need to get a private appraisal for your tax records. You will also need to fill out Section B of IRS Form 8283 and attach it with your tax return. Vehicles valued at less than $5,000 can have their market value determined by using the Kelley Blue Book.

Save receipts of improvements you have made to your vehicle and take pictures of the vehicle for your records. 

If you have further questions you can refer to the IRS's guide to car donations.