When donating a car, there are a few things you should know. You can donate all kinds of vehicles but each has its own regulations. Remember that you'll need to pay attention to the current laws. For instance, in the US, laws were changed in 2004 that limit the used car donation tax deduction of the donor to the amount the car is eventually sold for. These laws for donations of a car will vary by country, so make sure you pay attention.
It's important to make sure the charity is eligible to receive tax deductible contributions before donating a car. If you're in the US, ask the organization for their Letter of Determination from the IRS. In any country, make sure the charity gives you a good, clear receipt that's well documented in exchange for your donation. Remember that tax agencies look closely at donations not made in the form of cash, so clearly document the value of the vehicle, and keep good records.
Complete the appropriate tax forms if your vehicle is worth more than the minimum amount. Include a written acknowledgment from the charity, and make sure you know which form to fill out. If the organization sells the car, they have thirty days to provide you with a certification in most locations.
This certification says that the parties that sold and bought the vehicle were not related to one another. If the car is not sold, a receipt must still be provided withing the appropriate time limit, and the donor must be told what the car is to be used for, and state that it is not intended for sale.
Donations of a car that has a high value must have an independent appraisal, and possibly may need additional forms. Determine market values using a Blue Book or other guide, and do so carefully. Never simply pick the highest value for year and model. Instead, pay attention to condition, mileage and other factors.
Take detailed photos of the vehicle's interior and exterior, and make sure you have receipts for repairs and upgrades you've made to help document value. Remember that you are responsible for determining the correct value for the vehicle, not the charity. Most of the time, vehicles donated to charity are sold, and you may receive only a small deduction.
Donating a car can be very useful, but it's important to remember that it isn't the best choice for everyone. Pay attention to your circumstances and your area's regulations to decide if your car should be donated.
For more free information about donating a car for kids visit Cars to Charity. This free resource provides information about charities, tax information and useful links to help you donate your car to charity
