Quick Guide: How to Donate Your Car to Charity

4:45 AM RAWAT 0 Comments

A lot of people think that charities benefit the most when people donate to them. But contrary to that common belief, it is usually the donor and not the charity recipient that often comes as the biggest winner, especially in a car donation process. This article will provide you a quick guide on the important things that you should do in donating your car to charity.

Find a Charity that Accepts Car Donations Directly.

Avoid for-profit intermediary organizations that have widespread advertisement to handle your car donations. Find a charity that handles the transaction all by themselves without any third-party intervention, this will ensure you that the profits remain with them. Also, inquire about the charity that you choose to support, some charities already have a car donation program, and you just have to ask about it. Make your research about the charity, and continue looking for a high-performing charity that does quality work that you need

Transfer the Car Correctly to the Charity

It is important that you make the proper and necessary transfer to the charity, one bad mistake will open your donations to some serious risk. Some charities will request you to leave the assignment of ownership to charity donation in papers blank. If this happens, it might be best to consider another charity. Make sure that you formally sign your car over to the designated nonprofit, for you to avoid any liabilities of parking tickets incurred or worst, liabilities of crimes that your car is involved. 

When the charity receives your car, they will immediately sell it to the public, so if the new owner will purchase it and they will not register the vehicle, the car will still be yours in the eyes of the law.

Use Fair Market Value (FMV) for the Car.

Although several exceptions permit you to use the NADA guide, it is necessary to use the FMV when you donate a car. There specific instances where you can use the FMV. You can use it when:

-    The charity keeps the vehicle first and improves before selling it, or
-    They will not sell it and instead keep it for their operations
-    If the car is sold, but with a discounted price at a person having low income

In such a case, if none of these instances are present then you are only allowed to deduct the amount that the charity sells the car for at auction as specifically provided on the written receipt the charity provided you.

Complete Your Paperwork

IRS audits commonly happen in non-cash donations, so make sure that you keep thorough documentation of the vehicle donation. Say, for instance, if your car is valued over $250, then make sure that you obtain and retain a written receipt from the charity itself. Also. If the car is worth more than $500, then you have to complete section A of the IRS Form 8238. You can then proceed to attach your yearly taxes. This forms that you need to fill in depends on the worth of your car. Check your car value and inquire about the type of documents that you need to fill out.

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