FAQ.

What benefits are there of donating my vehicle to a nonprofit agency?

Possibility to reduce your taxable income.
Remove the costs associated with advertising.
No possible security risk.

Do you accept all types of vehicles?
Most cars, off road vehicles, trucks, trailers, boats, RV's, motorcycles, heavy equipment are accepted.

Does my car have to be working to donate it?
No. However, it must be in one piece and have an engine.

How fast can I get my vehicle picked up?
Within 24 hours. After the donation record has been created, agencies will reach out to you within 2 to 3 business days to pik up your vehicle.

Do I need a smog certificate in order to donate my car?
You may donate without such documents.

What is the agencies plan with the donated vehicles?
Donated vehicles are repaired for then to be sold for profit, or free given to people who have had their house and car destroyed by a disaster for example.

Everything you want to know about Car Donations!

You must have heard or read about car donations a lot off-late, especially on the internet. Car donations are picking up massively. It is not a new concept as such, but it is only recently that people have started considering it as a tax saving option. If you are a first timer, you may have several doubts such as which cars you can donate, how much tax deduction you can obtain, what are the advantages of donating a vehicle and so on and so forth.

Advantages of Donating a Car

Apart from the obvious financial benefit of tax rebate, there are various advantages of donating a car. Firstly, you no longer have to spend on maintaining and servicing the vehicle. Apart from that, even your garage gets free to park a new vehicle. But what is most important is that you will have this unparalleled feeling of having done good for the society. When you donate a vehicle to a charity or a non-profit organization, they conduct an auction and its proceeds are used for supporting the underprivileged. For example, if a non-profit works for the cause of education, the money obtained by selling your vehicle will go towards funding a needy child is education. Saving Taxes If you donate your vehicle to a charity, you may be eligible for tax deductions (subject to a few constraints). First of all, the charity must be registered with the IRS. IRS will give you a list of charities that are eligible for the same. Apart from that, there are legal considerations such as � � The donation amount should not be greater than half the amount of your gross adjusted income � You must get a written acknowledgement from the charity which states all the details such as your full name, vehicle registration number, taxpayer number of the donor, the date of donation etc. � The amount that is eligible for deduction may be of two types � firstly, if the car is sold through an auction, then the selling price determines how much deduction you are eligible for. Secondly, in case it is unsold at the auction and then gets salvaged, then you can opt for a fair market value or $500, whichever is greater Most non-profits and charities have a list of cars that they accept. It is better to read all the terms and conditions before hand, lest you donate your vehicle and realize that you are ineligible for tax deductions! For more information, read our blogs and get in touch with us.

How to maximize the benefits from car donation for Tax deduction

If you are thinking about getting rid of your old car you don’t use anymore but hesitant to sell it because of the Taxes. I would suggest you donate your car and get the Tax benefits while helping someone in need in the process.
When you give your car to a charity organization as a donation – it is called a car donation. You can also donate boats, RVs, ATVs, or any other type of vehicles. If you donate your car to a charity that is qualified by IRS section 501C-3 and tax exempted, you will also get a Tax deduction on your car donation. Although the process is simple, it is important that you know what you are doing when donating the car.

The first step is to find a charity that is qualified. You can ask the charity for the IRS certification or you can visit the official website of IRS for the list of qualified charity organizations. Some people may ignore this but morally it is also important that you care for the good cause the charity is working for.

When you give your car to a charity organization, you will receive a charitable gift Tax receipt. IRS limits the amount of tax claim to the final sales price of the donated car. There are a few conditions that you have to full-fill to maximize the Tax benefits in your next Tax return.

Before handing over your car to any charity, you should do some research about the organization. You may think that all cars go to needy people but most of the time this isn’t the case. These charity organizations often sell your car to local dealers, or auction these. If the car isn’t in good condition, it is send to junk yard to get the parts separated. Mostly, charity doesn’t care about the final price and they are okay with selling your vehicle at the lowest offer they find. In that case, you may not get enough Tax deduction.

It is advisable to find a charity who is interested to give your car to someone in need or would like to use your car. If not, look for a charity who is working with car donation centers. These are car dealers who sell your car in auctions and take some percentage of the sold price. Usually, they start the bid from the fair market price so on the day off, they will get at least the fair market price of the car. They are smart, professionals, and know how to sell a car at the best price.

According to the rules, you can only claim the fair market value of your car for the Tax deduction if the charity decided to use the car for its own operation or donate to some needy person.
If the sale price or fair market value of your car is greater than $500, you have to complete section A of IRS form 82332 and file it with your Tax returns. You can consult the latest copy of the Kelly Blue Book from your local library or the local car dealer to get the estimated market value of your car. If your car is worth more than $500, you need to get an appraisal of it as well to file for the Tax deduction. Filing for a Tax deduction for a donated car requires some extra documentation and focus. By doing a little research and keeping everything documented you can maximize the Tax deduction for your donated car.

 

 

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