ANSWERS: 1
  • There are many benefits associated with donating your car to a local charity. Besides helping out with a worthy cause, there are tax advantages for this particular donation.

    Tax Deduction

    As stated in "A Donor's Guide to Car Donations," an IRS publication, the maximum amount you can deduct on your income tax return is the fair market value of your car. Fair market value is the price a willing buyer would pay and a willing seller would accept for the car, when neither party is compelled to buy or sell, and both parties have reasonable knowledge of the relevant facts.

    Free Towing

    Many charity donation programs offer free towing on all donated vehicles.

    Recycling

    The Kentucky Auto and Truck Recyclers Association estimates that approximately 11 million vehicles are recycled every year, saving an estimated 85 million barrels of oil that would otherwise be used in the manufacture of new replacement parts

    Making a difference

    Donating your car can help someone less fortunate.

    Warning

    Some charities mistakenly claim that donors can deduct the full value of their cars as found in a used car guide, but the IRS will only allow a deduction for the fair market value of the car, which may be substantially less than the "blue book" value.

    Source:

    IRS: A Donor's Guide to Car Donations

    Resource:

    Kentucky Auto and Truck Recycle Association

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