How to donate a car to charity?

FOR IMMEDIATE RELEASE
(Free-Press-Release.com) March 25, 2009 -- Donating to charity is a relatively painless way to get rid of a car when you don't have the time to sell it or don't think you can get what its worth. While not every car is acceptable, donating a car to a charity lets you deduct its fair market value from your taxable income.
Before you donate a car to charity, you should realize that it is a little tougher than just dropping your car off at an organization. Here’s some suggestions about how to make sure you get the tax break and the charity receives the most it can from a car.

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How to donate a car to charity?

1. Avoid middlemen. Numerous for-profit intermediary organizations advertise aggressively on TV, billboards and elsewhere, offering to help you donate your vehicle to charity. Here’s the catch: These organizations typically keep about 50 percent to 90 percent of the vehicle’s value for themselves, and the charities don’t get what they could have gotten. To prevent this, check directly with charities you admire and find out whether they accept car donations.

2. Find a worthy charity. If the charities you normally support aren’t equipped to accept such donations, do some homework until you find a reputable charity..

3. Check the math. If you still feel compelled to use an intermediary organization – possibly because you’re busy – at least ask the organization how much of the car’s value will go to charity. If the organization simply gives charities flat fees — say, $100 for a used vehicle regardless of its value, or $2,000 a month — your donation may not be eligible for a tax deduction.

4. Know the status of your recipient. In order for you to qualify for a deduction, the charity that gets your donation must be an IRS-approved 501(c)(3) organization. Your church, synagogue, mosque or temple likely qualifies. (Check first just to make sure.) You also can visit the Internal Revenue Service’s Web site and search for Publication 78 to find other qualifying non-profit organizations. (Just type “78” into the search field on the IRS home page and you’ll be directed to the right publication.)

5. Deliver it yourself. Once you’ve identified a worthy charity, recognize that it will have to pay someone to pick up your car for you. To help the charity maximize the benefit of your donation, drop the car off yourself.

6. Transfer the vehicle with care. Want to eliminate all risk of running up parking tickets and other violations after you’ve said goodbye to your donated vehicle? Then formally re-title the vehicle to the charity, and report the transfer to your state’s department of motor vehicles or licensing. Never agree to leave the ownership space on the charity donation papers blank.

7. Get a Receipt. If you donate a car worth more than $500, the IRS must know how much the charity actually received when the car sold to determine your tax deduction. You must have a receipt to prove the transaction.

8. Fair Market Value. You won’t need evidence of the sales price if the charity keeps the vehicle or vessel and uses it in its charitable work, or if your donation is worth less than $500. Then you can report its fair market value based on listings from Kelley Blue Book and similar sources.

9. Keep records If your donation is worth more than $500, you’ll have to attach IRS Form 8283 to your tax return. If it’s worth more than $5,000, your documentation must include an outside appraisal. You’ll also need proof of the donation, such as a receipt from the charity and a copy of the title change.

10. Be detail-oriented. This paper trail may seem cumbersome, but think about it: This may be one of the biggest charitable donations you ever make. By taking the time to dot the i’s, you can make sure that the charity gets the most benefit and you get the biggest possible deduction.

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