Donating cars is one of the good ways to dispose of old and unused vehicles. Car donation is a renowned alternative in the US, and the best state following this practice is the state of California. Car owners can donate their cars to a charity of their own choice.
They can also donate other vehicles such as their boats, vans, etc. Your vehicle need not be in good condition for donation. Even broken-down ones are accepted for donation. These will be then fixed by the charity centers themselves. If you have decided to donate a car to a charity in California, here is comprehensive information on car donation in California.
Why Donate Your Car?
Car donation is a good thing in several ways. Firstly, your donated vehicle is utilized for a good purpose. Secondly, you get to dispose of your old car free of charge. Thirdly, your old vehicle is recycled.
Fourthly, you get to claim a tax deduction for your donated car. The process of donating a car is really simple. You just have to call a charity and people from there will pick up your car, or they will let you know where it has to be brought.
However, because of the existence of too many charities, and because of to scams out there, deciding upon the right organization is quite important.
How To Choose The Right Charity?
Ensure that the IRS (Internal Revenue Service) recognizes the charity. This will ensure that you get tax deductions for your donated car. You can do this by checking the checklist given by IRS. In this list, although religious organizations are not listed, they too qualify for tax deductions. The BBB (Better Business Bureau) can also provide you with this info.
Forbes has also enlisted US’s 200 largest charities. It has also disclosed the financial details of some of these. Only some of the organizations listed here accept car donations. You can also find organizations and charities that qualify for tax exemption on the IRS website.
In addition to the above, take the following also into consideration:
Get to know where your car will go and the purpose for which it will be used. California has numerous charity centers that accept car donations. These cars are then fixed as most of these will have some minor or major issues win them. Then these are put on sale at public auctions.
The company conducting the auction will work to ensure that many people will attend the auction and bid on the cars displayed. This works on the theory that the more people attending the auction, the higher the bids will be. Besides, the participants will be informed that the cars are sold to charity so they bid high on these.
Thus, these second-hand cars will be sold for a handsome price. Then, these cars are put to the best possible use.
- Ask to know if the money received through selling your car will be used within or outside your community. Usually, local charities use the funds received for the enlistment of the community instead of diverting the funds outside it. It is a good feeling to know that your money is used for the betterment of your own people.
- Get to know the areas within the charity that will get the money made from the sale of your car.
- Find out the efficiency rating of the charity. Avoid donating to charities with lower ratings as lower ratings mean that a higher portion of the funding received as donations are spent towards administrative affairs, and not for the services or programs for which the funding is received.
How To Donate A Car In California?
Here are systematic instructions on how to donate a car in the state of California.
- In order to donate a car to a charity in California, the first step is to submit a car donation form online. You can also call the charity to which you would like to donate your car. As mentioned earlier, if you want to avail a tax deduction over your donated car, ensure that the charity is recognized by the IRS.
- The tax receipt receiving procedure may vary from organization to organization. Certain organizations will send you the initial receipt via mail while certain others will send the receipt through the tow truck, which comes for picking up your vehicle. This initial receipt qualifies you to receive a tax deduction for a sum of up to $500. You can check with the charity organization to know the procedure that they follow.
- In California, it is a rule that you should not remove the license plate from your vehicle before donating it. In most of the other states, you must remove them before the donation of the vehicle.
- When you donate car to charity, fill out a Release of Liability form available with the California Department of Motor Vehicles. This will release you from any future liability after the donation of your car. In California, the Release of Liability is done by returning the DMV (Division of Motor Vehicles) form REG 138 or the pink portion of the title to the Department of Motor Vehicles in your locality. You can also fill out the Release of Liability form online.
- In case your car is sold for over $500, or if it gets qualified for a fair market value, you have to do more paperwork for tax deduction after the sale of your vehicle. The deduction on your taxes will depend on the price for which your car is sold or on its classification under fair market value vehicle.
- If you decide to claim your tax deduction for a car donation for a year, you should ensure that you donate it well ahead of the tax filing date. The charity should receive your donated vehicle at least the night before you file your taxes. However, putting off the donation until the last minute is risky as you may be unable to claim your car donation tax deduction for the current tax year.
In case you have more questions regarding car donation in California, you can ask a charity in your locality. These people will have enough knowledge of the paperwork and processes involved in this regard. You can also get in touch with the DMV in your locality to know more about this. Else, browse through the California DMV website for getting updated info on California state-specific car donation requirements.