Statement from the charity noting that the vehicle was sold between two unrelated parties and that you received no goods and services in return to qualify it as a donation. Year, make, model, and vehicle identification number (VIN).Receipt from the charity for the car donation.Additional information required for the tax write-off for a car donation includes: If the car value is over $5,000, you will need a written appraisal to be included with your tax forms. Also, IRS Form 8283 will need to be completed when filing annual federal income taxes. Begin collecting information needed for the tax deduction - Cars valued above $500 will require a written acknowledgment from the charity. If you use a vehicle pricing guide to determine the fair-market-value of the car, check to make sure it is the same model, year and condition for the listed value.Ĥ. In such cases, make sure you have written verification from the charity about that use. For example, if the charity did not sell the car but used it to help people it served or gave it away to a needy family. There are a few special circumstances where you could claim the fair-market-value of the car. Keep in mind that the resale price is likely to be far less than the fair market value of the car, especially if the car is in poor shape. The charity should inform you of this sale amount. ![]() The auction sale “gavel price” determines the value of your tax-deductible donation. Understand deduction amounts - In most car donation circumstances the vehicle is re-sold at auction by a third-party on behalf of the charity. To verify that the organization is a tax exempt charity, you can use this link or reach out to the charity directly for their IRS tax exemption letter: ģ. ![]() ![]() One exception would be a church or other house of worship, which is not required to apply to the IRS for charitable tax-exempt status. Verify the charities’ tax-exempt status - If you plan on taking a deduction for the car donation on your federal income taxes, make sure the charity is tax exempt as a charity under section 501(c)(3) of the Internal Revenue Code. Visit BBB’s to see if we have a report showing that the charity meets the BBB Standards for Charity Accountability.Ģ. Do some research - Whether you have been approached by a charity or are looking for a charity on your own, it is important that you understand more about the organization and whether it funds a cause you want to support and is trustworthy. What does the car donation process look like?ġ. If you have been approached by a car donation charity, you may want to consider this opportunity, but make sure you proceed with caution and do your research first. And why not? You can avoid the headache of selling or junking the car, help a charitable cause, and lower your tax burden, all at the same time. The gifting of used cars to charities has become a favorite way for Americans to dispose of unwanted vehicles.
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