How to Donate a Car to Charity – Forbes Advisor


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Do you have an old car you want to get rid of? You can try to sell it and take care of taking pictures, answering calls and emails, and scheduling test drives and inspections with potential buyers.

Or, you can donate your car to charity and potentially qualify for a tax deduction.

Many charities make it easy to donate your car. They might even get it back, working or not, for free. However, if you want to claim a tax deduction for your donation, you must follow IRS rules.

Here’s what you need to know.

How to donate your car to charity

Many well-known and reputable charities accept car donations, including Habitat for Humanity, Disabled American Veterans, and the Make-A-Wish Foundation.

Local high schools and vocational schools can also take donated vehicles for use in auto shop courses.

The easiest way to donate your car is to call the organization or fill out an online donation form. The charity will arrange for the car to be picked up or dropped off at a specific location. In addition, you will receive a receipt to use when preparing your tax return.

How to check car charities

When donating your car to charity, take precautions to avoid being scammed or contributing to a questionable charity. If you donate your vehicle to an organization that is not qualified by the IRS to receive tax-exempt donations, or if you do not receive the proper documentation, you will not be able to claim a tax deduction.

Ensure the organization is qualified to receive tax-deductible donations

Most charities that qualify to receive tax-deductible donations have 501(c)(3) status with the IRS.

If you are unsure if an organization is eligible, look up the charity in the IRS Tax Exempt Organizations Finderor call the IRS at 877-829-5500 and have the charity’s name and address ready.

Donate to effective and transparent charities

Even legitimate charities may be vague about how they use donations, or may only use a small percentage of contributions to charitable programs.

For example, a controversial car donation program is the Kars4Kids program, which airs radio and television ads across the country.

According to CharityWatchan organization that rates charities on their effectiveness, governance, and transparency, while Kars4Kids is a legitimate 501(c)(3) charity, it misleads potential donors by not informing them that it only serves children of a particular religion, and primarily in New York and New Jersey.

CharityWatch also reported that Kars4Kids spent more on overhead than charitable programs in 2015, a red flag suggesting the organization has not used donations effectively. But a Kars4Kids report on its operations in 2020 shows that most expenditure (60%) was spent on its programs that year.

Before selecting an organization to donate to, you may want to research the charity on CharityWatch or a similar nonprofit database to be sure it shares your values.

Claim a tax deduction for a car donation

Choosing a qualified charity isn’t the only requirement for getting a tax deduction when you donate your car. To ensure you can claim the full deduction, you must:

Itemize deductions

First, you will need to itemize the deductions to qualify for the contribution. If you claim the standard deduction, which almost 90% of taxpayers do, donating your car will not benefit you at tax time.

Gather the right documentation

The amount of your write-off and the documentation you need will depend on the value of the vehicle and what the charity will do with it. The organization can use the car in its operations or sell it and keep the proceeds.

Regardless of how the charity uses the vehicle, if you plan to claim the car is worth more than $500, you must obtain written acknowledgment of the donation. This acknowledgment must contain:

  • Your name and social security number or tax identification number
  • The vehicle identification number (VIN) of the car
  • The date of contribution
  • Confirmation that the charity did not provide any goods or services in exchange for the donation (or an estimate of the value of the goods and services provided)

If the charity sells your vehicle, your deduction is limited to the proceeds of the sale, which may be less than you think the car is worth.

For example, suppose you donate a car with an estimated value of $3,000 to a charity, but the charity sells the car for $2,000. In this case, your deduction is capped at $2,000.

Once the car is sold, the charity should send you Form 1098-C (or similar form) within 30 days. The form must contain:

  • A statement certifying that the charity sold the car in an “arm’s length transaction between unrelated parties”. In other words, the charity did not sell it to an employee or other related party at a discount
  • The date the vehicle was sold
  • The gross proceeds received from the sale

However, if the charity intends to use the car in connection with its activities, you can deduct the fair market value of the car on the date you donated it. In this case, the charity’s written acknowledgment must confirm that the charity intends to use the vehicle and describe its intended use.

You will need to attach Form 1098-C or other written acknowledgment, and Form 8283 to your income tax return when you file it.

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Frequently Asked Questions (FAQ) About Donating a Vehicle to Charity

How do I determine the fair market value (FMV) of my vehicle?

Several online vehicle pricing guides can help you determine fair market value, including Edmunds and Kelley Blue Book. If you use any of these resources, be sure to get a FMV based on the same make, model, year, trim package, and condition of the vehicle. Entering your car’s VIN can help you get the most accurate appraisal.

You may want to save the search results to keep with your tax records in case the IRS questions your assessment.

If you intend to claim the car is worth more than $5,000, you will also need to obtain a written appraisal from a qualified appraiser no later than 60 days before donating the vehicle. You can learn more about IRS documentation requirements in Post 4303.

Can I claim a deduction for a car given to someone?

No. You can only deduct donations to qualified charities. Donations to individuals, even if they are in need, are not deductible.

How much is the tax deduction for donating a vehicle?

It depends on the value of the vehicle and how the charity intends to use your car. If the vehicle is worth less than $500, you can claim its FMV.

If the car is worth $500 or more and the charity intends to use the vehicle in its activities, you can deduct the FMV. However, if the charity sells the car, your tax deduction is limited to the gross proceeds of the organization’s sale.


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