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Donating a Car

How to Choose Your Charity

Because you have nothing but good intentions, you want to choose a charity that has nothing but good intentions.

The Internal Revenue Service recognizes such charities as "qualified charities," and allows you to search for them online or view groups of charities and organizations that aren't normally listed but still considered qualified.

You can also find a list of charities thanks to Kentucky's Charitable Campaigns in Kentucky.

When you choose a charity from among those the IRS recognizes, you're helping ensure:

You aren't being taken by a scam charity.

You can take advantage of tax deductions.

Take Advantage of Tax Deductions

Once you've chosen a qualified charity, it's time to look at the details.

The IRS thoroughly explains the details in Publication 4303, A Donor's Guide to Car Donation, but here are the basics.

Understand the Financial Rules of Tax Deductions

If your donation is less than 20% if your adjusted gross income, you won't have many―if any―financial limitations to abide by; however, if your donation is over 20% of your adjusted gross income, you need to check out Publication 526, Charitable Contributions.

As you'll read in the publication, 50% of your adjusted gross income is the usual limit on charitable tax deductions. There are, however, cases in which your limit may be higher or lower.

Determine Your Vehicle's Fair Market Value

When you make your tax deduction, you can only deduct your vehicle's fair market value. It's important to understand that your vehicle's fair market value is not necessarily the same as the full value listed in the Kelley Blue Book.

The IRS's Determining the Value of Donated Property guides you through the process of finding your vehicle's fair market value.

Organize Your Paperwork

Whether you or an accountant prepares your taxes, you're going to need to keep up with paperwork specific to your tax-deductible vehicle donation. Such paperwork includes:

A written appraisal of your vehicle from a qualified appraiser.

Written acknowledgment from the charity.

Form 8283 Noncash Charitable Contributions.

Notify the KYTC

You don't need to formally notify the Kentucky Transportation Cabinet of your vehicle donation.

When you give the vehicle to the charity, sign the back of your title as the "seller," and have the charity sign as the "buyer." When the charity handles the registration process, the vehicle will then go into the system as belonging to the charity.