Donating a Car

Qualified Charities and Tax Benefits

To take advantage of the tax benefits donating a car carries, you must donate your vehicle to what the Internal Revenue Service (IRS) calls a "qualified charity." According to the IRS, only qualified charities can receive tax-deductible vehicle donations.

Finding Qualified Charities

The IRS provides both the electronic version and the online version of Publication 78, as well as Eligible Donees Generally Not Listed in Publication 78 to help you find qualified charities.

Researching Your Charity

Of course, you should also research your charity of choice beyond its tax-deduction benefits. Try the following resources:

• The IRS Web site or call them at (800) 829-3676.

• The National Association of State Charity Officials (NASCO).

• The Attorney General of Massachusetts.

• FAQs about Supporting and Evaluating Charities.

• Chapter 12, Section 8 of the General Laws of Massachusetts. (This includes all subsections.)

Understanding Tax-Deductible Vehicle Donations

After you decide on a qualified charity, it's time to figure out your vehicle's fair market value, realize your limitations, and organize your paperwork. IRS Publication 4303, A Donor's Guide to Car Donation explains everything in detail, but DMV.ORG provides important highlights below for your convenience.

Determine the Fair Market Value

Publication 561, Determining the Value of Donated Property, helps you determine your vehicle's fair market value―which is all you're allowed to deduct.

Limitations on Vehicle Tax Deductions

The IRS sets limitations on vehicle tax deductions. Refer to Publication 526, Charitable Contributions, to find out if you fit the criteria for such limitations.

The Paperwork

When you visit the Massachusetts Web page Donating a Car to Charity, you'll find a list of paperwork the Attorney General recommends acquiring during the vehicle donation process. IRS Publication 4303 concedes you should definitely obtain and hang onto:

• A qualified appraiser's written appraisal of your vehicle.

• The charity's written acknowledgment of the donation.

• Form 8283 Noncash Charitable Contributions.

Notify the Massachusetts Registry of Motor Vehicles

When you donate your vehicle to a charity, handle the title transfer in the same manner you would if you were selling your vehicle. Remember to make a copy of the newly assigned title for your records.

For further details, contact an RMV customer service representative.