You may not be able to get as nice a tax deduction from it as you once could, but car donation is still a good idea
Car donation is quite popular in the non-profit charity world. But is it really worth it to donate your car, even to the best of charities?
That’s a good question — exactly what I’d expect of a savvy consumer. It’s always wise to be cautious, even with charities. So let’s take a closer look at the auto donation issue.
Once upon a time, you could net a nifty Federal tax break on a charity car donation by deducting the car’s market value on your tax forms. This could be very nice indeed, if the car was still fairly new.
The IRS closed that loophole as quickly as it could because, like moonshine, it cost them too much potential revenue. Nowadays, there’s usually a $500 maximum limit on vehicular gifts. And don’t think you can get away with this by giving away your old Cessna. It applies to vehicles of all sorts, even airplanes.
Loopholes for the Loophole
There are some exceptions (as always in tax law), so be aware that even the $500 doesn’t apply evenly. And the deduction must reflect FAIR market value. If the car’s worth $50, you can claim only that much in most cases. If in doubt, consult an accountant. But don’t expect a big payoff from that rickety old hot rod.
There are, of course, ways around this restriction. If you donate your AMC Gremlin to Homeless Hamsters, Inc., and they (somehow) sell it for $600, you can credibly claim $600 — but only if the charity substantiates the amount within 30 days of the sale.
One Way or Another
Setting practical considerations aside, donating your old car to a non-profit somewhere is always a good idea. At the very least, they can use it for trips to the hamster store instead of having to pay cab fare.
Most charities, however, will jazz up your old auto a little and sell it at auction. Given a little donated time and materials, they can make even an old beater presentable. Those cars can then bring surprisingly nice prices.
What Are We Talking About Here?
According to the 1car1difference.com, a single donated car can bring in enough cash to:
Feed a family for a month
Provide two years’ worth of generic prescription drugs
Help a veteran pay for housing
Spay and neuter 10+ stray animals
Buy a dozen hamster habitats
Okay, maybe not the last one, but the rest are true. Besides, it’s the green thing to do. Recycling your car saves substantial resources that would otherwise be used to create new cars. Furthermore, it rescues lots of scrap from (and space in) the landfill. So make that car donation today!