You’ve probably seen the ads around, maybe heard them on radio and whatnot. Donate your car to The School of The Sacred Heart of Our Lady of Perpetual Motion, and you can write it off as a charitable car donation.
Indeed, that is true, in a sense. There are a number of organizations out there that will take your car from you, and you can write it off on your taxes. But in case you’re trying to be half-smart about this, let me just get this out of the way right off the bat: No, you cannot give away your oil-burning 1975 Chevette with 358,974 miles on the odo and claim that it is worth what a Mercedes Gullwing would go for.
You will only be able to write off the car for $500. If you feel the car is worth more than that, then you can claim it, but you will have to attach IRS Form 8283 to your tax return. If you are, for some reason, donating a car that is worth more than $5000, then your donation much be accompanied by thorough documentation.
This documentation must include an outside appraisal, for example, saying that the car you just donated is indeed worth more than 5K. Also, keep the proof of the donation, such as a receipt from the charity and a copy of the title change, because the IRS might want to see those as well.
I’ve actually done this is the past. I used to live in Hawaii (yes, it was great), and I had a 7 series Volvo that I didn’t really want to ship back to the mainland. It was starting to dissolve in the island climate, so I thought it would be good to get rid of it. Turns out it was farther gone than I had realized, and I couldn’t even given it to my Volvo mechanic friend, Chris, to strip for parts.
However, PBS was doing a vehicle donation promotion, so I was able to hand it off to them, and get a rather nice write-off in the process.