Donating a Used Car to Charity
Donating a used car to charity is a great way to benefit your favorite nonprofit organization and get rid of the on needed vehicle from your driveway. There are some simple steps to follow when donating a used car to charity. There are also number of concerns that people have. What are the laws about donating a used car to charity? Will might donation actually be tax-deductible? How much may I Deduct when I donate a used car to charity? Would I be better off selling my car in donating the money directly to the nonprofit organization? How do I select an organization when donating a used car to charity?
What is the tax status of the charity?
One of the very first steps before donating a used car to charity is to confirm that the charity is a registered 501(c)(3) organization as outlined by the IRS. It would be best to consult your tax professional accountant or CPA and confirmed that your income also meets guidelines where it makes sense to donate a used car to charity in order to get a tax credit. Naturally if you are not concerned about a tax credit or tax deduction when donating a used car to charity then this really doesn’t matter. When donating a used car to charity you may simply sign over the title to the nonprofit organization and they will proceed with a transfer of ownership just like if you were selling the car. You may want to check with the charity to see if they would prefer to buy the car for a dollar and the benefits for them if you either give them the car or sell it to them. For a nonprofit organization that receives a donated car there are requirements about how they use the vehicle or how long they keep it which directly impact you as the giver.
Did you know that if a nonprofit organization sells a used car that you donated in the first 12 months that you may only deduct the amount that they sold the car for. This could be especially disappointing if for some reason the car were less valuable than a when donated originally. For example, the nonprofit organization used the car for 10 months and put many miles on the vehicle it would now become worth far less than when you donated. Now when they go to sell the car they may perhaps receive several thousand dollars less in sale price, and that impacts you as the donor. this could make donating a used car to charity a very disappointing experience. Ask the nonprofit organization what their plans are for the vehicles that you understand what will happen.
What about the middleman?
There are a number of organizations that will help you donate your car to nonprofit organizations. Although there may be some benefit to using a middleman, you do not need a middleman when donating a used car to charity. Simply contact the nonprofit organization or charity directly and ask them about their process for receiving a donated used car.
What if my car doesn’t run anymore?
You may think that donating a used car to charity means that the car must still be operational. The truth of the matter is that most charities would be thrilled that you are donating a used car to charity even if the automobile no longer runs. Obviously the value is significantly less as it would either need to be repaired, or sold for scrap. Don’t let the condition of your car stop you from donating a used car to charity. if you are significantly concerned, perhaps sending a picture of your car to the charity would be a great place to start and ask if they would like to receive your car as a donation. Most nonprofit organizations that would be excited about you donating a used car to charity will be prepared to have services such as towing on standby so that you do not have to incur additional expenses.