Got an old car you’re about ready to send to the graveyard? Before you just park it in the yard or give it up, it may be worth more to a recycling center or as a tax deduction. Recycling centers will pay cash (check) and come pick up your car, while non-profit organizations will provide you with a donation receipt.
An increasing number of groups accept gifts of vehicles. The important thing is to make sure that you give it to a reputable and tax-qualified organization. Unfortunately, some con artists take advantage of people’s good intentions and accept cars that never go to philanthropic causes – so be sure to research it. Other groups just might not be an approved charitable organizations under IRS rules. Ask for copies of the group’s federal tax-exempt status documents or check the IRS Web site’s directory.
To write off your auto gift, you must itemize. If your old car is the only deduction you can claim, then it may not be worth it. But if your tax-deductible expenses are close to the standard deduction amount allowed for your filing status, counting the value of a donated car could be just what you need to make itemizing the right tax choice this year. Don’t worry if your car’s engine conks out before you donate: in most cases the vehicle doesn’t have to run. Many groups even provide free towing. In fact, it doesn’t even have to be a car. Vans, trucks, recreational vehicles, boats and heavy equipment are accepted by many groups. You must have a clear title to the vehicle, and it must be lien-free. Groups won’t accept cars that are still being paid for. You must have a receipt – which you’ll get from the organization to which you donate. For contributions of $250 or more, you must get a written acknowledgment of your gift from the organization before you can claim the deduction. The group getting the car will not value the gift – this is left to the donor. The IRS has recently changed the rules regarding fair market value of a donated vehicle, so please check with your tax advisor or IRS publications.
Check with your Auto Advisor for the names of recycling centers who may purchase your old vehicle or charitable organizations that support good causes and will provide you with a donation receipt.