Commonplace in the auto market, drivers are opting to “gift” their cars to charity as they just don’t want the hassle of the car selling process. If that’s the case for you, here’s a quick run down of some factors you should consider whether giving the car to a friend or writing off the tax value of your car.
Writing off car donation for taxes
You might be thinking of donating your car purely for the tax write off. If that’s the case, there’s a lot of factors that come into play, from the appraised value to the IRS forms, this is no easy task and likely more difficult than simply selling the car. That’s even more so the case when you take advantage of a local car buyer who specializing in only buying, and not selling. A car buying specialist wont tie you up with red tape while trying to sell you something on their lot. There’s already tons of resources online for utilizing tax write offs when giving your car to a charitable organization. Hence, instead of laying it all out in this article, here are some links to the most relevant tax info:
Tax Information For Donating Car to Charity
Reason Why Donating May Not Be the Best Option
Friends don’t give friends headache bound lemons
Looking to be extra charitable this holiday season by gifting your old car to a friend or family member? Awesome, but if your old car has serious engine problems, don’t do it. Giving someone a well functioning automobile is wildly altruistic so long as the car well. If the value of the car is under $500 and shortly after being gifted needs serious engine work, the cost of the work could very well outweigh the value of the “gift” itself. Hence, a good rule of thumb when gifting a car to family or friends is taking it to a mechanic and having them give a good assessment of whether the car is truly worth giving or not.
Pick the right charitable organization
- If you do intend to write off your car donation on your taxes, make sure to choose a charity which actually uses most of the proceeds to benefit the cause. You may already know this, but if not, keep in mind that most major charitable organizations actually use more then two thirds of their proceeds to keep the organization running. From paying board members to expensive marketing campaigns, “not-for-profit” corporations may not always be as altruistic as they appear. Guidestar.org is a great resource to determine how much of your donation actually goes to the cause.
- You will also want to check the IRS.gov website to verify the charity you choose is a properly listed organization, otherwise your write off might be denied.
- Lastly, at a minimum, also check the Better Business Bureau and look for large numbers of complaints which are a big red flag for a charitable organization.
Selling your car
On the flip side of your options, you can of course sell your car. If that’s the case, you’ve got a plethora of options. If you’ve got the time to invest, selling on the private party will likely yield the most money possible. Looking for a fair offer without the headache of listing and dealing with private buyers? Find a car buying specialist in your area such as Pinellas County’s OfferMORE.
For more information on selling your car, here’s a list of some great articles on the topic.