Car Donation Charities

Car Donations to Charity as a Tax Write Off

Many people are aware that when they make car donations to charity, that you can get a wonderful tax deduction; however, there are few things you may want to consider before saying your final farewell.

Ask for the organization’s Letter of Determination. This letter verifies the organizations tax-exempt status; in other words, is the company a charitable organization?

What if the company doesn’t have its Letter of Determination? Find out if they have any Letter’s of Organization with the appropriate    clauses in it. Basically, the process of receiving a Letter of Determination can take up to a year. I would definitely get advice from your    attorney and take a look at the verbiage in the articles.

Right after your donation, make sure to get a receipt that is well documented. The following should be included:  Donor’s name, description of item being donated, a statement showing if there were any services or goods in exchange for donation, an estimate of the value of services or goods being donated.

Keep an accurate account of what has been documented for the IRS. Make sure you have documentation verifying the estimated value of the vehicle and keep a detailed record of this.

One thing to consider when making car donations to charity is if your used car is worth $500 or more, you will need to fill out the    newest revision of the tax deduction form. You will need to attach this to your tax return. Make sure to also have an acknowledgment     written by the charity.

You may want to find out if the organization is planning to sell your vehicle as they must give you the sales price within 30 days of the   donation; they must also supply you with the certification showing the vehicle was purchased and sold by parties that are not related   to each other.

Even if the car is not sold, they still must provide you with a certification within 30 days showing what their intentions are in utilizing   the vehicle (repair or upgrade, etc) and their intentions of not selling or transferring the vehicle.

Get an appraisal completed for your car if it worth over $5,000

For vehicles under $5,000, make sure to get an estimated value from the Kelly Blue Book based on your car’s information.

These are just a few tips when you decide to make car donations to charity. Always seek professional advice if you have a question   about this; seeking professional advice about something that you are unsure of can save you fines and penalties from the IRS down the   road.