![]() Research the charity you plan to give it to. When donating a car, here are eight key things you should consider to maximize the benefits to charity and minimize the risk to yourself.ġ. Individuals donating cars can inadvertently mark themselves with big red flag for Internal Revenue Service auditors. If the car in question is valuable and you plan to take a deduction for it, protect yourself. Kalivas, however, suggests that charities would be much better off if people sold their cars themselves and donated the proceeds, or simply called up charities they know to find out if they have car donation programs. "A lot of people wouldn't otherwise be donating to charity if it wasn't with their car."įor people solely looking to dispose of an unwanted car for which they won't take a tax deduction, it may not seem to matter what happens to the vehicle and who benefits. "This is an innovative way to support charity in a way that helps the charity and the donors," said Kirwan. 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. 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. More from Smart Investing: Bitcoin too risky for "serious" investing, say advisors Millennials lack confidence to invest: Bank executive What investors should do before market gets gored "A lot of these organizations mislead the public, and people need to be careful." "They're not transparent about what they do," Kalivas said. The organization, however, got a D rating from CharityWatch because it distributes less than 50 percent of the money it takes in and because, despite a national advertising campaign, it fails to adequately disclose that the money goes to benefit Jewish children only, and almost exclusively in the New York/New Jersey area. Kars4Kids, for example, a New Jersey-based organization with an insipid yet highly successful advertising jingle, has received more than 450,000 car donations, according to its website. Others misrepresent the cause they support and/or give low percentages of their funds raised to their stated targets. Many of the organizations are for-profit intermediaries that give token contributions to a participating charity. Attorneys General from multiple states have investigated car donation charities for false advertising and self-dealing. The problem is the industry is riddled with fraud and misrepresentation. We recommend that you consult your tax advisor to help you determine your best course of action."At the end of the day, donating a used car could be the least cost-effective way to give to a charity," said Stephanie Kalivas, an analyst with CharityWatch, an organization that monitors the charitable giving industry. To facilitate the process, upon donation of your vehicle you’ll be asked to declare if you intend to value your vehicle at more or less than $500. ![]() In the event that you initially value your vehicle in excess of $500, but it sells for less than $500, you will then be responsible for determining the fair-market value of your vehicle, not to exceed $500, to use for your tax deduction. Vincent de Paul is also required to report this information directly to the IRS. Federal tax law requires you to attach a copy of this statement to the tax return on which you claim a deduction for your donated vehicle. The letter will include your tax ID number (typically your social security number) and the vehicle identification number. Vincent de Paul will send you a letter within 30 days of the sale telling you the vehicle’s selling price. Vincent de Paul receives for the vehicle. ![]()
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