Donating Junk Cars To Charity
What You Need To Know

You might think that the old junker that has been sitting in your back yard for the last few years isn’t worth very much.  To you, that may be the case.

How to make a junk car donationFor officially registered charities, however, funds raised by donating it can go a long way to helping your favorite cause.

The IRS permits vehicle donations to such charities and the good news is that they do not need to be in great condition or working order.  You may also donate junk boats, RVs, SUVs, motorcycles, farm machinery or even old classic cars.  At the very least, your donation can be sold for parts or its scrap metal value.

In IRS publication 4303, A Donor’s Guide To Vehicle Donations, a donor has the right to claim an income tax deduction for his charitable donation.

Below, we have asked some of the most important questions that donors have when considering the donation of a junk car.  For more general questions and answers, see our FAQ.

1. Documents You Need To Donate a Junker?

What documents you need to donate a junk car to charityNo matter what the condition of your vehicle, you have to prove that you are the legitimate owner and that you have the right to donate it.

For that, you need a copy of the title documents which must be passed to your chosen charity.  You cannot make a donation without them. Unfortunately, the rules governing vehicle registration and titles differ greatly from state to state in the US.

Therefore, we recommend consulting our state by state guide to car donation where you will find the necessary links to your local DMV office.

2. What’s Your Old Junker Worth?

What's your used car worth?The value of your vehicle will be determined when it is sold by the charity.  For junk cars, book values have little relevance and should be ignored.

In most cases, however, you can assume that your donation is likely to raise less than $500.  The value, however, is important as it this figure that determines what information must be supplied to the IRS in order for you to successfully claim a tax deductible car donation (see section 3).

3. How Much Tax Can You Deduct?

What's the maximum tax deduction you can claim?The IRS permits you to claim a tax deduction when you donate your junk car.

Firstly, the charity or organization to which you donate must be officially registered with the IRS.  That is, it is eligible to receive tax deductible donations.  You can check the tax exempt status of such charities, elsewhere on this website.

Secondly, you should note that the amount raised by your charity will determine what information or ‘reporting requirements’ you need to provide to the IRS.  We have summarizeed these as follows:

To Claim Up To $250

You need to provide the following information:

  • Name and address of the charity
  • The date of donation
  • The place of donation
  • A fair description of the car

Claims Between $250 and $500

  • All of the above, and
  • A written acknowledgement from the charity that must include the name of the charity, a description (but not value) of your car, and one of the following:
    ■ a statement that no goods or services were provided by the charity in return for the contribution, if that was the case,
    ■ a description and good faith estimate of the value of goods or services, if any, that the charity provided in return for the contribution, or
    ■ a statement that goods or services that the charity provided in return for the contribution consisted entirely of intangible religious benefits, if that was the case.

Claims Above $500

  • All of the above, and
  • If the deduction you are claiming for a donated car is greater than $500, you must complete Section A of Form 8283 (NONCASH CHARITABLE CONTRIBUTIONS).

Note that the amount you actually save will depend upon the level of tax you normally pay.

4. Where Can You Donate Your Junk Car?

Where can you donate a junker?According to the IRS, junk car donations can be made anywhere in the United States including  Hawaii and Alaska.

If you cannot personally deliver your junk car, many charities will arrange to visit you and collect it provided the costs of doing so are not greater than the likely sales prices.

Check out state-by-state junk car donation guide for more information about donating your used car wherever you are.  On these pages you will find everything you need to know relating to vehicle titles and transfers and, in particular, what you need to do as a seller or donor of a junk car in your state.

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