How to Donate a Vehicle And Get Tax Benefits

One can donate a vehicle and get tax benefit of IRS act; but most of the people are not aware about this fact. Plenty of information is there over the internet for those people, who want to donate a vehicle. It is better to donate a used car than exchanging that for a new one or selling that to any of the old car dealer. You can get tax deduction, when you donate a vehicle to any of the charitable organizations, as per the market price of the vehicle donated.

You can donate a vehicle to any 501(c) (3) organization and the list of these organizations can be easily found from IRS documentation. To donate a vehicle all you need to do is find the nearest vehicle donation center to your house and drop your vehicle, whether it is a car, pickup truck, SUV or RV. To donate a vehicle and get maximum tax deductions, you need to contact a car donation representative working for the charity organization. Those who donate a vehicle should also follow what happens to the car after donation. After you donate a vehicle it could be used for the projects undertaken by the charity, for example, transporting medical staff and supplies to remote areas. Sometimes, when you donate a vehicle in a good condition, it might be auctioned off by the charity as well.

When you donate a vehicle which in turn is auctioned by the charity, it becomes a clear case of sale, wherein you will receive the sale receipt within 30 days of the auction. If you donate a vehicle you need to claim IRS tax deductions, by submitting this sale receipt. For those who donate a vehicle this sale receipt along with the written acknowledgement from the charity is the proof for the market value of the car for which you are claiming a deduction. If you donate a vehicle which is donated further by the charity, you will be allowed to claim deduction equivalent to a fair estimation of the vehicle’s market value.


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