We have a habit of driving cars straight into the ground - and we have been once again successful in doing so with our 1998 Dodge Minivan. The 2nd transmission has gone kaputnik and it is time to move on. Figure the car is worth more as a donation then anything.
Arlington has a little information about donating a car - mainly just who to donate it to. Okay - but this is a car we are talking about. Before I donate it, I would like to understand the process: what is the tax benefit - and how do I make sure my liability for the car ends with donation.
Consumer Reports is always good with information and once again has a pretty good article. CR recommends, during the process
- Record the name and the address of the group to whom you donated the car and the date of the donation
- Get a receipt
- Retain a copy of the title indicating the change of ownership
- Report the transfer to the DMV
- When the charity takes possession of the car, remove every indication of your ownership: tags, registration, inspection stickers.
Most charities partner with a car auction shop. The auction shop is the charities agent and the auction shop is actually the one who will come and pick your car up. Many charities ask that you fill out the title showing that your are transferring title, but leaving the "to whom" blank. I mean, I dont know, but I am kind of uncomfortable with that. I want to know that the title transfer is clean so that if, 15 minutes after the auction shop tows the car away, if my former car gets into an accident - its perfectly clear its not mine. I really dont know what the law is here but then that is why I am concerned with the informal loosey gooseyness of a lot of the charity donation opportunities.
The IRS has some advice about donating cars:
Internal Revenue Service officials today reminded taxpayers that they must obtain a charity’s written acknowledgment of their vehicle donation before they claim a deduction for the donation. For deductions of more than $500, the taxpayer is required to attach the acknowledgment to the taxpayer’s return for the year of the donation.Obvious, as with all donations to charity, the charity to which you donate must be an actual IRS approved charity.
. . . . .
However, a taxpayer cannot take a charitable contribution deduction of $500 or more for a vehicle donation unless the taxpayer has received a written acknowledgment of the donation from the charity and attached the acknowledgment to the return.
A search of the Commonwealth of Virginia website did not provide much useful information.
Arlington charities that accpet vehicle donations include the Arlington Red Cross, Melwood, Goodwill, Salvation Army, Habitat for Humanity, and more.
I consistently like Goodwill of the Greater Washington Area which has some wonderful shops in Arlington. Once again Goodwill proves itself by having the best information I found online on the donation process and what you should do. For example, Goodwill reminds people to remove the plates and register the transfer at the DMV to avoid getting parking tickets on the car you thought that you had donated several months prior.