Donate a Car

Before you donate a car, make sure that the nonprofit organization is legally a nonprofit organization. Many organizations claim to be legal nonprofits but never filed their taxes properly. If this is the case, you will have a problem claiming your tax deductions when it is time to file your taxes or if the IRS audits your tax return. And, remember to get the tax receipt for your car donation. It is unwise to donate a car without verifying these information.

How to find a non-profit organization to donate a car to?

If you don't know of a nonprofit organization to donate a car to and have not seen any ads in any papers, you can contact your local chamber of commerce will be able to help you.

Car donation, the IRS and tax deductions

When you donate a car, you should get tax deduction benefits that goes with car donation. You can find information on how to claim tax deduction for a car donation and the IRS tax rules you must follow in the IRS tax publication 4303. This IRS tax publication was revised in August 2004. The publication outlines what type of car donation qualifies as a tax deductible item on your tax return.

Common problem when donating a car

The biggest concern with car donations is the value of the car being donated. For tax deduction purposed, people often want to inflate the value of the auto donation. This caused problem with the IRS which wants a fair market value of the auto donation, not perceived value by the donor. To alleviate this problem with car donation, you must ask the organization accepting the car donation to issue you a written statement when you donate a car to them. Please see our other section of Charitable Giving for receipts of donations. Before you donate a car, you should do some research on the fair market value of the car you are about to donate.