Car Donations
Car Donations require certain steps to avoid possible problems and to get the proper tax deductions.
Qualified organizations for car donations include nonprofit groups that are religious, charitable, educational, scientific, or literary in purpose, or that work to prevent cruelty to children or animals.
To make certain that the car is donated to an eligible organization use the IRS Web site to check that an organization is qualified by searching Publication 78 at IRS Charities Info.
Review the organization’s state registration and financial filings. These documents are commonly filed with a state charity regulator such as the State Attorney General’s Office or the Secretary of State’s Office.
Ask whether those soliciting the donation are officials of the charity itself or a private fundraiser acting on the charity’s behalf. If it is a private fundraiser, what will it do with the vehicle? Will the car be fixed up and given to the poor and needy? Or will it be resold? And if it is resold, what share of the proceeds go to the charity?
Some organizations mistakenly claim that donors can take the full “Blue Book” value of their car for a deduction. The IRS, however, will only allow a deduction for the fair market value of the car.
Document any car donations and their fair market values.
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