At a certain point in the cycle of automobile ownership, donating a car may be a better, less stressful option than trying to sell it. More people are finding that the benefit from the tax deduction outreaches the potential return and problems of selling. Add the satisfaction that a donation is a substantial benefit to a charity and that the donor’s generosity is appreciated.
As U.S. Trust states, “philanthropy is more than giving money.” Donating a car is one of the true “win-win” situations available today. The charity benefits from the donation while individuals achieve a substantial tax deduction. Hundreds of charities will willingly accept a car donation in almost any repairable condition. Such charities as Cars for Kids, Vietnam Veterans Association, National Kidney Foundation, Alzheimer’s Foundation, Disabled American Veterans, Solving Kids Cancer, New England Center for Homeless Veterans, and many more are eager to accept a car donation.
Find the Perfect Charity
A simple internet search will uncover a large number of not-for-profit charities that are eager to take your used vehicle. They will arrange for pickup or request that the car be delivered to a specific site. It is essential that you ensure that the charity to which you are donating qualifies for the tax deduction.
Value the Car Correctly
To deduct the donation from income taxes, the donor must set the value correctly. Using online automobile valuation sources like Kelley Blue Book can be a guide for determining the actual value of the auto at the time. Accepting the charity’s estimate of value may also be appropriate for the IRS. When filing, the proper tax forms must be completed to take the legitimate deductions.
Fill Out the Appropriate Paperwork
For the donor’s benefit, it is necessary that the title of ownership transfer when the vehicle changes hands. Proper transfer eliminates liability or fines that may be incurred after you and the vehicle part ways. Also make sure to receive a correctly completed transfer of ownership, much as with a sale. The document should have the date of the donation, location, and value of the vehicle as estimated at the time.
Visit the IRS website or consult with a tax consultant to understand all of the ramifications and rules for valuations of car donations to charities.
Contact Alpine Towing & Recovery if your vehicle requires towing. If in the Colorado Front Range, call for assistance in Colorado at 1.800.869.2869. Alpine has offices in Salida, Buena Vista, and Woodland Park, Colorado.