Tips on Donating a Car to Charity


  • Edmunds Logo Picture

    Edmunds Logo Picture

    Edmunds helps consumers navigate the stricter rules for donating a car to charity. | December 10, 2013

Just the Facts:
  • Edmunds offers five tips to consider before donating your car to charity.
  • "Today's rules are much more stringent and it's nearly impossible to deduct the full market value," said Carroll Lachnit, Edmunds consumer advice editor.
  • Anyone who deducts a charitable gift, including a car, should consult with a tax professional before filing a return.

SANTA MONICA, CaliforniaEdmunds offers five tips to consider before donating your car to charity.

"Today's rules are much more stringent and it's nearly impossible to deduct the full market value," said Carroll Lachnit, Edmunds consumer advice editor.

Under the current rules, you can only deduct the amount that the charity confirms in writing. If a charity sells the car at auction or to an auto salvage yard, the deduction is based on the car's selling price, which, in some cases, may be close to zero.

Donors should choose a qualifying charity, one that has been approved by the IRS as an "exempt-status" or 501(c)(3) organization.

If you want to claim your vehicle as a tax deduction, you must itemize your return, even if the car is the only deduction.

Donors should save all related paperwork or electronic files, whether the car is junked, sold at auction or given to a charity's client.

Instead of donating the car outright, consider selling the vehicle yourself and donating part or all of the proceeds.

Anyone who deducts a charitable gift, including a car, should consult with a tax professional before filing a return.

Edmunds says: These tips should help you to maximize the tax deduction for your charitable effort.

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