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How to Donate a Car for the Homeless

by Katie Proctor

Overview

Donating your old, unwanted vehicle seems like an easy, stress-free way to give back to the community. However, there are several steps that you will need to take to avoid future tax problems and to ensure your vehicle gets into the right hands. Following this guide will help smoothly transition your vehicle to those in need while making sure you get the proper tax deductions.
How to Donate A Vehicle

Step 1

Gather all receipts for past repair or improvements and take pictures of the vehicle to verify its value.
Step 2

Determine your vehicle's worth. Cars valued over $500 or over $5,000 require separate IRS forms when filing taxes (see step 8). For vehicles worth over $5,000 an independent appraisal is necessary. For vehicles worth less than $5,000 use the Kelley Blue Book or the Hearst Black Book to determine the value. Keep in mind vehicle condition and mileage when figuring value.
Step 3

Find a reputable charity. Call the charities that you normally support and ask if it is equipped to accept vehicle donations. You can also research charities' records online at http://www.bbb.org/us/charity/ and through http://www.charitynavigator.org/.
Step 4

Check the status of the recipient. In order for you to qualify for a deduction, the charity that gets your donation must be an IRS-approved 501(c)(3) organization. You can visit the Internal Revenue Service's Website and read Publication 78 (http://www.irs.gov/charities/article/0,,id=96136,00.html) to find qualifying non-profit organizations.
Step 5

Make a personal delivery. The charity will often have to pay to have someone pick up the vehicle. Maximize your donation by delivering the vehicle yourself.
Step 6

Re-title the car to the charity. Visit or call your local DMV to find out your state's procedures for re-titling the vehicle. This will help you avoid any future vehicle ownership questions.
Step 7

Find out if the charity will use your vehicle or sell it. In many cases, your vehicle will be sold for cash by the charity itself or by a dealer to raise funds for the charity. If your vehicle is sold, it is your responsibility to get a receipt from the charity showing exactly how much money it made. Be aware that your tax deduction is limited to the amount that the charity sold the vehicle for.
Step 8

File the appropriate IRS forms. If the car is worth more than $500, you must complete Section A of IRS Form 8283 and attach it to your tax return. You are also required to attach written acknowledgment from the charity and its sales receipt to a third party, if applicable . If the charity is not going to sell the car, it may be required to provide certification stating how it plans to use the car. If the car is worth over $5,000 and an independent appraisal has been completed, you must also fill out Section B of IRS Form 8283.

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Clear title vehicle Vehicle title Camera Vehicle repair or improvement receipts Computer with Internet IRS form 8283
Clear title vehicle
Vehicle title
Camera
Vehicle repair or improvement receipts
Computer with Internet
IRS form 8283
Avoid middlemen. Many for-profit organizations advertise on TV and billboards that they will help you donate your vehicle to charity. However, these organizations typically keep about 50 percent to 90 percent of the vehicle's value as profit.
Avoid middlemen. Many for-profit organizations advertise on TV and billboards that they will help you donate your vehicle to charity. However, these organizations typically keep about 50 percent to 90 percent of the vehicle's value as profit.