How to Donate Your Car to Charity
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One oft-overlooked means of helping your favorite nonprofit is to donate your old used car. The nonprofit can then use it for business transportation or sell it to reap some cash. Regardless of how a nonprofit elects to use the donation of your used vehicle, there is a process to take to ensure you get the tax benefits you deserve.
Donating a vehicle to a nonprofit organization is a little more complex than dropping off your old clothes to the area thrift shop. There are steps to transfer the title, just as there are in the regular sale of a car. With vehicles, there must always be a paper trail to track ownership. In this article, Step 1 recommends finding a nonprofit that can take your car, Step 2 suggests talking to the charity to see how the car would be used, Step 3 explains how to sign over the title, Step 4 advises getting a gift receipt, and Step 5 suggests taking the car off your list of personal property.
Part 1 of 1: How to donate your old used car to charity
Step 1: Make sure your chosen nonprofit can accept your used car donation. The simplest way to find out if your favorite charity accepts vehicle donations is to simply call.
While the person who picks up the phone may not be able to answer your question, you can ask to speak to the manager or leave a message for callback.
Step 2: Determine how the charity will use the vehicle. Again, this boils down to simply asking the person in charge.
You can only claim the donation of your used car on your taxes if the charity does one of three things with the vehicle:
- Actively uses it to benefit the community
- Makes significant repairs to increase its value
- Sells or donates it again to a person in need at below market value
Step 3: Sign your used car’s title over to your chosen charity. On the back of your used car’s title, sign your name under the Seller’s line.
You will also need to fill in the odometer reading of your car, your address, and the sale price of $0. The nonprofit can fill out the portion indicated for Buyer.
Step 4: Get a gift receipt from the nonprofit that took your old used car. Ask the nonprofit to provide you with a gift receipt to keep with your records.
Depending on your state’s laws regarding vehicle donations, you may be able to claim the gift as a deduction on your income taxes. Find the contact information for your local DMV.
Step 5: Remove the car from your personal property. Go to your local Assessor’s office, and ask to have the used car you donated taken off of your list of personal property, so you will no longer be responsible for paying the taxes on it.
The assessor may ask to make a copy of your gift receipt, so it is a good idea to take this with you.
Donating your used car to charity can help your community greatly. By following the proper steps to donate your vehicle, this process can go smoothly and possibly even benefit you on your taxes.