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Donating a car to charity? You might want to pump the brakes !

Donating a car to charity? You might want to pump the brakes !


Thinking of donating to your clerk for a good tax deduction? proceed with caution.

The gift of used cars in “charities” has become the preferred method of disposal of unwanted vehicles for Americans. And why not? You can avoid the headache of selling or jamming a car, helping a charitable cause and reducing your tax buren at the same time.

Unfortunately, the experience is rarely, in fact, such a win-win situation. Not only are donations typically seen to have very little income from used car sales, but if they are not careful, donors can avoid the taxpayer. At the end of the day, a donated car may be the least cost-effective way to donate,” said Stephanie Kalivas, an analyst at CharityWatch, an organization that oversees the charitable giving industry.

The problem is that the industry is plagued by fraud and misrepresentation. The Attorney General of several states has investigated car donation donations for false advertising and self-dealing. Many organizations are for-profit middlemen who contribute tokens to a participating charity. Others misquote the cause they support and / or give a lower percentage of increased funds to their stated goals.

For example, Kars4Kids, a New Jersey-based organization that has a highly successful advertising jingle so far, has received more than 450,000 car donations, according to its website. However, the organization received a D rating from CharityWatch because it disbursed less than 50 percent of the funds it took and because, despite a national advertising campaign, it failed to adequately state that the money was only Jewish Goes to benefit children, and almost exclusively in the New York / New Jersey area.

“They are not transparent about what they do,” Kalivas said. “A lot of these organizations mislead the public, and people need to be careful,

Wendy Kirwan, director of public relations for Kars4Kids, said the costs of marketing and operating the car-donation program are high but that because the organization processes donations in-house, more money goes to its charitable work than others who use third parties. She also said that while the catchy advertising jingle doesn’t spell out which kids benefit from the charity, the information is readily available on their website kars4kids.org. “This is an innovative way to support charity in a way that helps the charity and the donors,” said Kirwan. “A lot of people wouldn’t otherwise be donating to charity if it wasn’t with their car.”

1. Research donations if you plan to give it. If it does not have a 501 (c) (3) nonprofit status with the IRS, it is not a donation and your donation is not tax-deductible.

2. Choose efficient donations to give. There are many organizations such as CharityWatch that evaluate charities and rate them for efficiency in supporting their cause.

3. Item. To take a tax deduction for car donation, you must itemize the deduction on your return. There are detailed rules about the amount you claim. Taxpayers can deduct the full market value of the donated car under three circumstances: the charity uses the car in its functions; It makes physical improvements to selling or using the vehicle; Or the charity donates or sells to a needy person for less than the market price. Otherwise, you can only deduct what the charity receives as income from selling the car.

4. Get a receipt. Be sure to obtain a receipt from the charity for the vehicle and eventually certify how much the vehicle was sold for. Documents must be donated within 30 days of the car being sold.

At the end of the day, donating a used car could be the least cost-effective way to give to a charit

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