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How to donate a car and work with car donation companies

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Documents You'll Need to Donate A Car, and Documents You'll Need To Get Your IRS Deduction.... continued




You'll also need to complete Section A of Form 8283, Noncash Charitable Contributions, and attach it to your tax return. Do NOT forget to attach Form 8283 to your return, or your deduction may not qualify. Also, if you have more than one kind of deduction ($2,000 in books, plus $3,000 in stocks, plus your car donation, for example), attach a 8283 for each kind of donation.




1) Complete both Section A and B of Form 8283, Noncash Charitable Contributions. This will require getting the signature of an authorized official of the charity.

2) Get a written appraisal of the car from a qualified appraiser. There are a slew of rules about what qualifies as an acceptable appraisal from an acceptable appraiser, outlined in Publication 561, Determining the Value of Donated Property.

If the charity sells your donated car (instead of giving it to a needy person who is going to actually use it), you'll need to have the charity's car donation letter also include the following additional information:

- a statement that the car was sold in an "arm's length" transaction between unrelated parties. "Arm's length" basically means that the sale was between independent parties that were on equal footing in the deal. Ie, this was not a case of a father selling his car to his son for a $1, and both parties participated in the deal without either of them being obligated to the other beyond the terms of the deal.
- the date the car was sold
- the gross proceeds from the sale
- a sentence explaining that your deduction can not exceed the gross proceeds from the sale of your car (just so everybody's clear and you can't say you didn't know when the IRS audits you).




Up to two years after you donate a car, you might still hear from the charity. In the instance when you donate a car and the charity is going to use the car themselves, if the charity ends up selling the car within two years of your donation, they'll need to send you a copy of Form 8282, Donee Information Return, which they'll file with the IRS.




Yes, you'll also need a form from the Department of Motor Vehicles. Before you actually turn in the car (or the charity comes to pick it up), you'll want to transfer the title of the car to the charity, and have the license plates removed. In most states, to transfer the title you'll need to fill out a form indicating that the car has been donated.


© 2010 City Different Marketing LLC | This site does not provide tax advice. Please work with a certified tax planner to determine which car donation option is best for you.