First is the dove of peace and serenity hatched from the knowledge that you have given back to the world in your own way. Second, and probably the more practical bird, is scoring a tax cut.
Done improperly, the boat or car donation process might be the death of you. See these tips to forestall any roadblock or iceberg in the way of your (probably) well-intentioned deed:
Car Donation Tips #1
Some charities are not prepared to accommodate such donations, let alone worthy of your prized asset. Research until you land a reputable organization. The Better Business Bureau website and Charity Navigator keep tabs on charities’ history.
Car Donation Tips #2
For you to be eligible for a tax deduction, your chosen charity should be a 501(c)(3) organization approved by the Internal Revenue Service (IRS). The IRS’ Publication 78 includes a list of qualified charities car donations or boat donations can go to. Your church, temple, mosque or synagogue would likely fall under this list.
Car Donation Tips #3
Do not eat the bait of intermediary companies telling you to make your donation through them. A middleman has a profit motive, i.e. to keep as much as 90 percent of your donation’s value for themselves, with barely anything else for your chosen charity.
These organizations tellingly make hard-line marketing campaigns on print, TV, etc. To be certain, inquire directly with your favored charity whether or not they welcome used boats or cars as donations. Stay away from the middlemen as much as possible.
Car Donation Tips #4
Maybe you are too busy to handle these affairs. If you insist on going through a go-between organization, ask if most of your donation would proceed to your designated charity. When the middleman only sets aside a flat fee to your charity, your donation may be disqualified from a tax cut.
Car Donation Tips #5
Charities pay for the transport of your car or boat donation if you do not deliver the goods yourself. Save them the hassle and outflow.
Car Donation Tips #6
Lest you want to incur traffic-violation-related tickets on behalf of your boat or car charity, donate with consideration. This means formally transferring ownership of the vessel or vehicle to the nonprofit. Fill in the blanks denoting the new owner in the necessary documents. Also notify your state’s vehicle licensor about the re-titling.
Car Donation Tips #7
Before the IRS grants you a tax cut, it will need proof of what your boat or car donation to charities is really worth. Since most charities eventually sell such donations for cash, they would have to show an official receipt to the IRS displaying the amount of money it gets from the sale.
Car Donation Tips #8
For other charities, car donations and boat donations are meant to be used for what they are. In such a case, or when the vessel or vehicle is valued less than $500, you can just show the IRS its fair market value as dictated by leading valuation companies.
Car Donation Tips #9
Carefully document your donation if your vessel or vehicle is worth more than $500. Fill up IRS Form 8283 and attach it to your tax return, along with an evidence of the donation, e.g. certificate of the re-titled car or boat. Your papers should include external appraisal if the boat or car is valued at more than $5,000. Filing these documents will ensure the charity capitalizes on your erstwhile asset and you earn the optimum tax cut in return.