Vehicle Donation Process Explained by Kars4Kids
Last updated July 14, 2017.
The million dollar question… how much will the value of my tax deduction be?
So many donors have this on the forefront of their minds. They want to do a good deed and at the same time gain something as well. In fact, the United States government actually encourages us to give charity by offering the benefit that any value donated to charity will not be taxed from your income.
Yet, when it comes down to understanding what value they will get, the terms and concepts can be confusing. Donors don’t want to part with their vehicle until they are sure what value they’ll receive in return. Sounds fair to me.
Here are some common questions which we hear from donors:
Q: Can I deduct the Kelley Blue Book value of my car?
A: The value which you can deduct on your taxes depends on what the charity does with your car. If the charity uses your vehicle, the amount which you can deduct is the fair market value. The IRS says that guides like KBB are not “official”, but they can provide clues to the fair market value. However, if the charity sells your vehicle, then it depends how much they sell it for. If they sell it for up to $500, you can deduct the fair market value of the car, up to $500. And if they sell it for more than $500, the amount you can deduct on your taxes is the amount which the vehicle sold for. (Source: https://www.irs.gov/pub/irs-pdf/p4303.pdf) At Kars4Kids, the vehicles donated are generally sold to fund our work.
Q: Can you give me a ballpark figure for the value I’ll receive for my car?
A: Give us a call at 1-877-KARS-4-KIDS, and one of our representatives will be happy to assist you.
Q: I put a few hundred dollars in repairs into the car, will that raise the value?
A: It depends on the nature of the repairs, but most probably yes.
Q: I didn’t get a 1098-C form to send to the IRS, where do I get that?
A: In most cases, the receipt which you receive from the charity can serve as a legal substitute for the 1098-C. (If your deduction is $5,000 or more, you will need a 1098-C. See more information in our complete guide to tax deduction for car donation.) If you have misplaced or never received your receipt, Kars4Kids makes it easy to download your receipt online at our donor portal.
Q: I feel uncomfortable giving over my Social Security number, why do you need it?
A: This is required for donations valued over $500 in order for the IRS to recognize your donation as tax deductible.
We decided to make our tax information section more user friendly with clear delineated frequently asked questions and answers, along with a short video interview with the Kars4Kids controller.
For complete information on tax deduction for car donations, check out http://www.kars4kids.org/tax-deduction.asp.