Are you wondering what to do with your loved one’s vehicle once they can no longer drive? There are several charities that are worth considering. Are you thinking of taking a tax deduction from this donation? If so, then take a look at the rules in place with IRS for these types of donations before you do. In IRS lingo, vehicles are known as a “non-cash donations.”
IRS issued a brochure entitled “A Donor’s Guide to Vehicle Donations” [Publication 4303 which can be viewed at this web link: https://www.irs.gov/pub/irs-pdf/p4303.pdf
This publication states:
You must be eligible to deduct charitable contributions for federal income tax purposes:
You can deduct contributions to a charity only if you itemize deductions on Schedule A Form 1040 and
Your charitable donations cannot exceed 50% of your adjusted gross income.
Also, see IRS Publication 526 Charitable Contributions for details on claiming deductions and deduction limits.
In this publication, they have also outlined four important first steps when considering this as an option:
Check out the charity
See if you will get a tax benefit
Check the value of your vehicle
See what your responsibilities are as a donor to a charity
Briefly, the amount you may deduct for a vehicle contribution depends upon what the charity does with the vehicle. They typically sell the vehicle. This is reported in the written acknowledgement you receive from the charity.
Regardless, all written acknowledgements must contain the following:
Your name and taxpayer identification number
Vehicle identification number
Date of contribution
One of the following:
a statement that no goods or services were provided by the charity in return for the donation, if that was the case,
a description and good faith estimate of the value of goods or services, if any, that the charity provided in return for the donation, or,
a statement that goods or services provided by the charity consisted entirely of intangible religious benefits, if that was the case.
The IRS explains that Donors may claim a deduction of the vehicle's fair market value under the following circumstances:
The charity makes a significant intervening use of the vehicle, such as using it to deliver meals on wheels.
The charity makes a material improvement to the vehicle, i.e., major repairs that significantly increase its value and not mere painting or cleaning.
The charity donates or sells the vehicle to a needy individual at a significantly below-market price, if the transfer furthers the charitable purpose of helping a poor person in need of a means of transportation.
Now let’s take a look at some possible charitable organizations:
Vehicles for Veterans
“Vehicles For Veterans is a vehicle donation program benefiting veterans throughout the country. When you donate a car to Vehicles For Veterans, it will be auctioned or recycled, and the proceeds will help support disabled and other veteran programs that help veterans who have selflessly served our country.” https://www.vehiclesforveterans.org/orlando-florida/
Make a Wish Foundation’s Wheels for Wishes
“With your help, a child who is unable to explore the wonders of Orlando will be given the opportunity to. We just need your car and we’ll turn it into a dream come true for a child in Orlando. Wheels For Wishes is a vehicle donation program benefiting Make-A-Wish® Central and Northern Florida, including Orlando, Kissimmee, Daytona Beach, Gainesville, Palm Coast, Palm Bay, Port St. Lucie, plus all the way down to Miami, and more. https://www.wheelsforwishes.org/orlando-fl/
Goodwill Car Donations
“To support local programs right here in your Florida community, let us take those running and non-running vehicles — from cars and trucks to RVs and motorcycles – off your hands. All you have to do is call us or fill out our online form to get things started, and we’ll take care of everything else!” https://www.goodwillcardonation.org/car-donation-florida/
The Salvation Army
“Do you have an old car sitting around in your driveway or backyard that you haven't driven in years? Even one that doesn’t run? Or do you have a new car you don’t need anymore? Instead of letting it rot away in your driveway, do some good by donating your car to the Salvation Army. There is no cost to you for making the donation. The SA will use the car to help people in your community, and you can receive a tax deduction for the donation.” https://www.wikihow.com/Donate-a-Car-to-the-Salvation-Army
Additional information on this subject can be found in the following Interiors for Seniors Blogs
Non-Cash Donations (Blog #34)
Call Interiors for Seniors for a FREE consultation 321-279-3301.