Donating a classic car should be a simple and efficient process, but for many inexperienced charities the donation process is not. Giving Center is here to change that! This is because many donors of classic cars don’t understand that the donation process isn’t always easy. There are potential scams, serious tax issues and other pitfalls that could render the experience financially and morally worthless. With the vast experience and knowledge Giving Center has, the donation process is smooth and easy. Protect your charitable gift by arming yourself with the following critical information about classic car donations to ensure that what you give is used in the best way possible.
Repairs and Safety
Classic car donation is different from traditional car gifting in that the value of antique automobiles is generally much higher than the average modern gifted vehicle. However, this also means that there are often issues with safety and repairs that many donors will seek to correct before gifting the car. Others will prefer to donate the car as-is, even if it’s not road worthy. There are charities that will cater to both types of donors. Giving Center accepts vehicles whether they are running or not! In fact, they offer pickup of your charitable donation for free! When you donate with Giving Center, you can be sure you will get the most out of your contribution, and the highest possible tax deduction.
Some legal experts recommend that the donor take all steps necessary to professionally correct any potential safety liabilities that could cause problems “down the road.” Alternatively, many donors work with an attorney to have a document drafted that transfers these issues and the task of mitigating them to the receiving party. It’s a small price to pay for peace of mind.
Find a Legitimate Charity to Support
All too often donors do not conduct necessary due diligence when it comes to selecting a charitable organization. There are hundreds of reports from around the country of cars being “donated” inadvertently to a charity that wasn’t approved by the IRS. This means that, in most cases, the donor won’t be able to claim the fair market value of the vehicle as a deduction. Alleviate your concerns and donate with Giving Center! They are a nationwide IRS approved 501(c)3 nonprofit charity organization that aims to help students, families, veterans, the homeless, rescues, and so many others!
All of their information can be found on their website here. You can search their EIN through the IRS website, and can be contacted at 888-228-7320 for any questions you may have! Rest assured you will receive a tax donation receipt as well as your tax for 1098-C upon completion of your donation.
Deal Directly with the Charity
In many cases, advertisements for car donation services or organizations are actually paid for by groups that intercede in the gifting process in order to make a profit. As middlemen, these groups do little more than make arrangements between a donor and a charity and take a large percentage of the gift for themselves. In fact, many in the industry believe that very little money that is gifted in this way actually reaches the charity.
Consequently, it’s important to work directly with the charitable organization whose work you’d like to support. This is the only way to ensure that the maximum value of your gift goes to support the worthy cause you’ve chosen. Work directly with Giving Center representatives by contacting them at 888-228-7320.
Delivering the Classic Car
While tax benefits are a common reason cited for donating a classic car, for most people it’s about the philanthropic work at hand. If your primary concern is maximum value for the charity, you should consider delivering your classic car gift directly to the charity. Otherwise the organization will be forced to pay for transport costs that will ultimately reduce the value of your gift.
Transfer of Ownership
This is critical. You must ensure that a proper transfer of ownership occurs when you make your gift. If the vehicle is not transferred correctly, you could be held responsible for any liabilities the car presents once it leaves your care. This includes parking tickets and related citations, and some possibility of trouble should the car be involved in an accident or crime.
General Car Donation Tax Rules
Everyone’s tax situation is different, but overall the following are some critical bullet points concerning tax rules and donating a classic car:
Ensure the charity is a 501 (c)(3) nonprofit organization. If the charity sells your car, it must send you IRS form 1098 C within 30 days. This form indicates how much the organization received for the vehicle.
If the fair market value of your gift is more than $500, you’ll need to file IRS form 8283.In most cases, if the fair market value of the car is more than $5,000, an independent professional appraisal will be required in order to file for a tax credit.
If the car sells for less than $500 but has a fair market value of at least that, you may be able to earn the full credit. In order to get credit for your gift on this year’s tax return, you must donate your car by 12/31.
Rules Regarding Use of Your Classic Automobile Donation
Your tax credit will be directly affected by the way your car is used. In many cases, charitable groups will use donated cars for their transportation needs, as an attraction for fundraisers or other events, or they may give the car to a person in need. Most people will still be able to take the full tax credit if they can show evidence of this type of use. Therefore, it’s important to discuss with the charity how they will use the vehicle before you execute your plan to gift a classic car. The IRS has a pamphlet outlining the rules regarding car donations and what is expected of donors, and it’s worth checking out if you plan to donate a classic car.
Donating a classic car is a powerful way to benefit those in need while reducing your financial burden via a tax credit. However, if not gifted correctly, your philanthropic actions could cause more trouble than they’re worth. To be absolutely certain you go about it in the best way possible, consider discussing your intentions with an attorney or tax advisor (or both) before you drive that old classic off into its next life.
If you are interested in making a classic car donation, be sure to check out Giving Center’s website for more information! Be sure to get your donation form in to be considered for a 2020 tax deduction!