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Donating a car?

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NutmegCT

NutmegCT

Great Pumpkin
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My next door neighbor has a 20 year old Alfa Romeo 164. Runs and drives, good inside, engine "needs work" and paint is now "patina".

He's advertised it for about six months, but the only offer he got was $500; he sees them for sale for several thousand. Altho' his income is low, he knows he can use the book value for the donation. He thinks he'd rather do that, than waiting it out for a serious buyer.

He asked me about what charity he could donate it to. Said there are literally dozens of "Donate Your Car for Cancer" ads and websites.

Has anyone ever used one of the advertised Donate Your Car organizations?

One ad I saw said "almost 90% of your donation will be used for charity". That got me wondering ... how do you know if your donation is actuallly helping someone other than the person running the ad?

Can anyone recommend a trustworthy Car Donation organization?

Thanks.
Tom
 
A number of years ago I donated my older Ford Explorer to the Salvation Army. It had transmission woes that would have cost more than the book value to repair. They sent a flatbed, gave me a donation receipt for book value in exchange for the title, and removed it from my property.

I looked over my favorite local charities to find one that would take the car donation...
 
I have donated several cars to Casa Esperanza - they provide aid to Cancer victims, but are local to NM I think.
 
Salvation Army
 
This is interesting - from one of the Donation sites:

"The Vehicle Donation Program provides the donor with written acknowledgment (a Tax Receipt or IRS Form 1098C) within 30 days of selling the vehicle, stating either the amount the vehicle sold for (if over $500), or that the vehicle is eligible for the fair market value deduction (if it sold for less than $500)."

So evidently you don't know the value of your donation until after it's sold by the donor organization. I always thought the tax deductible amount was the book value of the donated car.

If the organization sells the "book value $2000" car for $600, you only get a $600 deduction?

Edit: if that's the case, then donation seems to negate selling it outright and donating the entire sale price.

Tom
 
I am not sure of that...my 12 year old, non-operational Explorer was probably worth less than the $500 deduction that I got, and I did not have to pay to have it removed from our property, so I was happy in my situation. Your neighbor would at least get a deduction equal to his best offer when he tried to sell his car too.
 
I donated a couple of cars years ago when the IRS was allowing for book value. The problem was that many people abused the system by donated vehicles that were definitely not worth book value, myself included. All I was asked was whether the body was intact, and the engine was in it. Today, the rules have changed, so better to check with IRS to find out what the rules are regarding donated cars.
 
As usual, a bit of digging makes this even more interesting:

From IRS Publication 4303:

"The maximum amount you can deduct on your income
tax return is the fair market value of your car. Fair market
value is the price a willing buyer would pay and a willing
seller would accept for the car, when neither party is
compelled to buy or sell, and both parties have reasonable
knowledge of the relevant facts."

So per IRS regs, you can use the fair market value (book value minus "repair needs", etc.) as the deduction.

But the quote I made earlier from that Car Donation website, says you'll get a receipt from them *after they sell your car*.

Doesn't that sound like you can just ignore the dollar amount on that receipt, and use the "fair market value" instead?

Inquiring minds ...

Tom
 
AS I understand it (and I've donated a few cars) if they actually sell the car for a specific price - that is what the IRS will use. Call them and ask the question if you're not sure. The Charity will provide teh IRS with a form that tells them how much they sold the car for.
 
Brooklands said:
If you use a CPA for your tax return, check with your filer to get solid advice as well...
Click to expand...

Good advice - i do recall in a similar situation, we were given the blank form and it was our responsibility to fill in the amount.
 
I made my living off of reselling donations. Salvation army in N.O sells junk at ridiculously high prices, more than book if the car was perfect. I quit buying from them. V.O.A here sells at auction to dealers only. Sometimes it brings decent money, others not. IIRC, Salvation Amry's CEO make 425K a year. How 'bout the Boy Scouts, local church? I wouldn't donate to any organization tied to a hospital.



Tell that sucker put it on Bring a Trailer.
 
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