How to go about car donation
How To Go About Car Donation
Donating your used car is an alternative to selling it in the market. This is especially true for unused cars that are in non-running condition. If you were to try and sell such cars in the market you would first have to conduct repair work and search for buyers which would take up quite some time.
Amongst the benefits of donating your car is the fact that you receive a tax cut. Secondly you can even donate a car that has reached the end of its life and does not work any longer. Furthermore most car donation companies will be more than willing to receive your car from your home without you having to incur any extra costs of managing delivery. In cases where donated cars are auctioned, the donor is entitled to receive a portion of the proceeds and can select the particular charity to which the remaining proceeds should go to.
Although car donation has been made much easier than it used to be before it is still different from donating other items like clothes and furniture. This is because you have to keep the element of tax breaks in mind. In order to receive the tax break you need to follow a certain procedure. The IRS or the particular charity to which you intend to donate can also provide you assistance in this regard.
The first step is to select a charity to which you want to donate. Preferably you should go for one that does not charge you a removal fee. It is important to determine that the charity organization to which you are looking to donate is qualified and registered by the government. Again, the IRS can provide you with authentication in this matter.
You also need to make sure that you know what kind of cars are eligible to be donated. Only those cars that have been manufactured for the purpose of transport can be donated. This means that cars that you purchased to sell cannot yield you a tax break. In order to illustrate this fact we can use the example of a car dealer who sells your car to the charity.
The task of determining the fair market value of your car is also your responsibility. This is the average market price that you will be able to yield for your car in the open market. The charity’s management can help you in determining the estimated selling price of your car. However in case you do not want to rely upon the management of the charity organization you can conduct this research independently and take guidance from used-car selling guides. In case your car is worth more than $5000 you should have it professionally appraised. A good idea to take pictures of the interior and exterior of your car in order to get the best estimated price. You should also keep the commitment receipt of the charity and any further documentation that you may have been provided as this will come in handy when it comes to claiming your tax deduction.