Car Donation is very popular because it is giving while getting something in return. A charity receives the car, sells it, and uses the profit to fund a cause, and getting something in return due to the tax breaks a donor gets.
What The Charity Does
A lot of people wonder how charities use the donated vehicles. Actually, most charities, like the American Red Cross has their own used car lots. Others auction the automobiles to the highest bidder and then some simply use the cars in carrying out their mission.
To Use Or Not To Use
No, charitable institutions do not simply toss coins to decide whether an appropriated car should be utilized for implementing programs or sold at a certain price or to the highest bidder. What they do is classify the vehicles into certain programs that it may be of great advantage to.
Let’s take for example Charity O: Charity O has 5 programs, the first: meals on wheels, second: aiding people to gain employment, and third: an educational fund. The first thing a charity does is to evaluate the running and physical condition of a Car. If it still works well then they can maybe use at a delivery car, or lease it to a person needing a vehicle to work or school.
Most charities, especially those listed on the IRS publication 78 depend solely on car donations and other contributions in order to perform goodwill, hence they make it easy for people to donate their vehicles. The institutions always have IRS forms on file together with their donation forms.
Furthermore, it is also the philanthropic organization’s duty to provide the documents needed for the donor to claim a tax deduction. These documents depend on how the car donation was put into use. If the car was assigned to an agenda, the charity will give you a tax voucher that clearly states the value of the car. The tax write off will be based on the car’s fair value that may be found on the Kelly blue book price listing of automobiles fair market values.
The charity also has to provide a paper acknowledging your appropriation. The instrument has to contain the details of the benefaction like an honest estimate of the cost of your car, an assertion that the charity did not repay you anything in any manner, or that if they did do something the deed consisted of intangible things like religious counselor, etc. All these have to reach you within 30 days of donation or else you cannot claim the tax subtraction.
Why Wait Donate!
There are those who hesitate when it comes to donating a car. After all, a car donation entails certain responsibilities like proper documentation and whatnot. But the important thing here is that you are helping someone while making it worthwhile for you because you reap not only financial benefits but spiritual and emotional as well.
A word to the wise, now that you have a glimpse of what a charity goes through to raise funds and even accept car donations, try and make it worth their while. If you can, deliver your car donation. This act helps a charity save a small yet significant amount of money by not having to pay a tow truck or driver to pick up your car. Not only that, but you may also establish a long-lasting relationship with the charity workers, and you might even become one someday.