There are number of reasons to donate your used cars to charity. Some donates their cars to get blessings; some donates to get tax deduction, while some just want to get rid of the old junk placed in their garage. Charity Organizations need the used cars so that it can be used for the medical purpose, food programmes etc. While the charity organizations who don’t want to use the cars, they can sell the used cars and can fund their organization’s activities. You can donate any of your vehicles whether it is cars, trucks, bikes, bulldozers, SUV’s, planes, boats, helicopters etc. Every vehicle is eligible for donation. Only the main thing is that vehicle should be in your name and the value of vehicle should be more than its cost of towing. Value of car can be calculated only on the basis of current market price i.e. the price car will fetch if it is sold today. There are few things a person must know before donating the car:
1. Always avoid middlemen. Never take the help of the intermediates in donating your vehicle. These intermediaries keep about 50% to 90% of the value of the car with them and charity will not get much. The best way to donate the cars is that you should donate on your own. If you are little busy and want help of the third party broker than just ask the broker that how much charity will receive from the sale of vehicle. If charity only receives flat fee or monthly agreed price than donor will not be able to get tax exemption.
2. Charity must be IRS registered. In order to get deduction, the charity to which you are making donation must be IRS approved u/s 501(c) (3). You can search on internet the list of IRS approved charity.
3. Statutory Documents required. Always take the receipt from charity stating that how much value does charity received. However if your donation is more than 500$ than you have to attach IRS Form 8283 to your tax return and if the donation is more than 5000$ than complete proof of donation has to be attached.
Now how much you can claim as a deduction? The amount of deduction is equal to the amount of money received by the charity from the sale of use vehicle. However if the car is not sold and rather it is used for the charity activities than Fair Market value can be taken as deduction.
There are number of ways to donate your car. You can also donate your vehicle online. First of all choose a charity which is IRS approved. Then give the complete details of your car like the year of purchase, chassis number, make, model etc. and also give your name and address. Submit the form by filling all this details and fix the time for vehicle pickup.
Always help the poor people by donating things to charities, NPO’s etc. Rather than selling them to earn few bucks. Just donate things to earn blessings which are more valuable.