If you are planning to donate your car to charity, you may think that it has to be in good condition or at least good enough to drive. Fortunately, most charities do not require your car to be in any minimum running or cosmetic condition to be donated. However, the condition of your car may impact how much of a write-off that you get to take.
Charities Will Take Whatever People Are Willing to Donate
When a charity takes a car from an individual looking to donate, they may have a buyer lined up regardless of the car’s condition. This means that you may be able to donate the vehicle even if it has rust or water damage. In some cases, it may be sold to a wholesaler who will then sell the car at auction or flip the car privately. It may also be sold through a private auction held by the charity or refurbished before being donated to another person.
What Happens If the Car Can’t Be Used on the Road?
If your car is sitting on blocks in the front yard because it won’t start or doesn’t run, the charity will often come pick it up for you. They will load it in a truck and take it to their own lot or storage facility. You will get documentation saying that you donated the car and will still be able to take a tax write-off for your clunker. Some charities may also give you a check for the car in lieu of a tax write-off.
How Much Can You Deduct for the Donation of Your Vehicle?
You can generally deduct the fair market value of the automobile. This can be found using resources such as Kelly Blue Book or Black Book. If you have used the car for business purposes in the past and have depreciated the car for tax purposes, you may have to repay some or all of the depreciation. If you have any questions as to the valuation of your car, you may want to take it to an appraiser prior to donating it. You can also talk to the IRS or a tax adviser as it relates to how much you can write off of your taxes.
The condition of your car doesn’t matter as much as your willingness to provide an organization with a cheap car that can be refurbished or sold to help that charity’s mission. Regardless of how large or small the tax write-off is, helping the community may ultimately be worth more than any trade-in value a dealer would offer.