- 1). Choose a charity to which to donate your car. Organizations such as the Salvation Army, United Way, local churches and various other nonprofits are all interested in accepting cars as donations. They sell the vehicle and pocket the profit. If you wish to search farther afield to donate your car, find other appropriate charities by consulting a listing of the Forbes Top 200 Charities in America.
- 2). Confirm that the charity you've selected is approved by the IRS (Internal Revenue Service) as a charity and eligible to receive tax-deductible contributions. The organization must be a registered 501(c)(3) organization and will usually have that information on its printed material. The IRS maintains a listing of eligible charities in its Publication 78, available on the IRS website. The publication does not list all eligible charities.
- 3). Contact the DMV in your state to cancel your registration and tags and determine whether or not you have to actually physically turn in your tags. Regulations differ from state to state, and you may do this either over the phone or in person. For example, in North Carolina, you must have the charity's name and address, the date of the car donation, the mileage reading from the odometer, and a notation of damage to the car. Then, you must sign your name under where it asks for the seller on the car's title, and get the form notarized. Finally, remove the license plates from the used car and either use them on a different vehicle or take them back to the North Carolina DMV.
- 4). Get a receipt. You'll also need proof of the donation, such as a receipt from the charity and a copy of the title transfer. Per current IRS guidelines, if your donated car is worth more than $500, you'll have to attach IRS Form 8283 to your tax return. If it's worth more than $5,000, your documentation must include an outside appraisal.
- 5). Determine the fair market value of your car. This is not necessarily the "blue book" value, but refers to the price of a comparable vehicle as listed in a used car buying guide, many of which may be found online, such as Edmunds. For hints from the IRS on valuation, consult Publication 561, available on the IRS website.
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