Here Is A Method That Is Helping People To Donate A Car

Do you want to get rid of your old car? It’s easy to get rid of it! Just donate it to a charity in California.

Donating your vehicle to a charitable organization is a great way to qualify for a tax deduction. The process is simple and you don’t have to worry about the time it will take you to complete the whole process. Furthermore, you will get the most out of your car in terms of the highest tax deduction.

A charity that utilizes donated vehicles for either transportation or for hauling goods will obviously benefit from these donations. However, in most cases these donations are sold in masses, by charity itself or a car dealer to help raise money for the charity. If the dealer is involved, the charity will receive a flat fee for each car, and sometimes it can be as little as $50 per car.

Donating your car? – Get to know how tax deduction works

Tax deduction on your car donationBefore January 2005, the internal revenue service – IRS, was allowing individuals who donated their cars to charity to qualify for car donation program, where the tax deduction was based on your car’s market value irrespective of the amount it was sold for.

To determine the market value of your donated car can be difficult and a time-consuming process, and this made it difficult to know the right amount of the tax deduction. Fortunately, the new tax law that came into effect in the month of January 2005, has cleared the confusion that surrounded value of a donated car and any other vehicle.

Important tips to guide the donors who are planning to donate a car to a charity

  • To get the highest tax deduction on your donation, and to ensure that your car fully benefits the charitable work, you can give it out for use in the organization’s operations. Otherwise, the tax deduction you receive from your donate car will not based on a fair market value, but limited to the funds that the charity will receive from its sale. If the charity decides to sell the car without involving a car dealer, ask about the percentage they expect to receive.


  • Make sure that the charity you want to donate your car to, is eligible to receive the tax deductible contributions. You can ask for the organization’s letter of determination from IRS which verifies the charity’s tax exempt status.


  • Ask the charity if they accept car donations directly or through a third party. So, if this is the case drive the car to the charity to avoid towing or pickup services. This will benefit the charity to get full amount of proceeds when they sell it.


  • Make sure to get the receipt of your car donation from the charity. Keep the document of your car’s value and other necessary records since non-cash donations are the most common triggers of IRS audit.


  • If your car’s value is more than $500, you will be required to fill the section A of the IRS Form 8283 and make sure to attach it with your tax return. Also file your tax return with together with a written acknowledgement letter from the charity. If the charity decides to sell the car, it must provide you with certification showing that the car was sold to unrelated parties and the amount within 30 days.


  • If the value of your vehicle is worth $5000 or more, then you need an independent appraisal. You will be required to complete the section B of the IRS form 8283.


  • Remember you are obligated to value your car and pay any penalties if IRS find any inaccuracy in the figures.


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