Donating Trucks To Charity
What You Need To Know
According to the IRS publication 4303, A Donor’s Guide To Vehicle Donations, a would-be donee is not simply limited to donating cars to their favorite charity in order to claim an income tax write-off.
There is an active ‘market’ in boat donations, classic and vintage cars, RV donations, motorcycles and mopeds, even jet-skis and snowmobiles. In fact, many more ‘machines’ qualify.
Trucks, therefore, fall clearly into the category of items that can be donated. Charities do not tend to be too fussy when it comes to accepting donations (they simply sell them at auction), so even if you have a monster truck, you could be looking forward to a sizeable deduction on your next Federal tax return.
Below, therefore, we have provided all the information and relevant links you need if you are thinking about making a truck donation in your area.
1. Documents You Need To Donate a Truck?
Unlike boats and jetskis, for example, to donate your truck to charity you are most certainly going to need to present a copy of its title proving that you (or your company) have the right to donate it.
The rules governing vehicle titles and registration vary considerably from state to state. Therefore, we recommend you learn about what the Motor Vehicle Department (where your truck is registered) requires of you when donating (or selling) your truck.
See our state-by-state truck donation guide for more information.
2. What Types of Truck Can You Donate?
The IRS places no restrictions on the types of truck
you can donate to charity.
Therefore, no matter whether you have a fire truck, a dumper, a moving, garbage, pickup or tow truck, most charities will be very pleased to accept it.
3. Can You Donate ‘Junk’ or Non-Working Trucks?
It might surprise you but your truck does not have to be in good working order to be accepted.
Of course, it helps if it is as the charity is likely to receive a higher price at auction and you, in turn, will be able to claim a higher truck donation tax deduction.
The same applies to junk car donations.
4. Claiming The Highest Possible Tax Deduction?
The difference in potential sale value between a truck in working order and one that isn’t could be quite considerable. If your truck, therefore, is roadworthy but simply requires new parts or general maintenance, you would be well advised to have this type of work carried out before you donate it.
Find a Charity To Repair Your Truck
Failing that, if the costs of doing so are prohibitive, you should look for a charity that is willing to carry out the repairs for you. The benefits are two fold.
Firstly, by investing in the truck, the charity stands to realize a greater sale value at a charity truck auction, thereby adding additional funds to their coffers. Secondly, you get to benefit by being able to claim a higher tax deduction.
The IRS states that you can only claim the value of the truck when sold and not more.
Can You Claim The Truck’s ‘Fair Market Value’?
There are other ways in which you may be able to claim a higher tax deduction, however. The IRS defines what it calls ‘gross proceeds rules’ and exceptions.
To be able to claim the truck’s fair market value (FMV), you’re interested in the IRS’ exceptions. Basically, you can claim the FMV (that is, its market value on the day you donate it) if you can find a charity that will either:
- use your truck for a ‘significant period’ in the course of its own fundraising activities before selling it;
- give or sell your truck below the market value to a needy individual (someone on welfare with a large family to support who requires a truck to earn his income)
Of course, this sounds ideal in theory, but finding a charity that operates like this might be a challenge.
Some of the larger charities certainly function like this as far as cars are concerned and we recommend consulting our vehicle and truck donation programs‘ page for more information.
Note that donating your truck may not be the most tax efficient option for you. Please read our separate page that explains how much tax you are likely to save.
5. Where Can You Donate Your Truck?
Truck donations, according to the IRS, can be made anywhere in the United States, even Hawaii and Alaska.
Many charities are often willing to travel long distances in order to collect your truck, providing the costs of doing so do not outweigh the anticipated selling price.
Check out state-by-state truck donation guide for more information about donating your truck wherever you are. The information on these pages is important as 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 truck in your state.
- Alabama, AL
- Alaska, AK
- Arizona, AZ
- Arkansas, AR
- California, CA
- Colorado, CO
- Connecticut, CT
- Delaware, DE
- District of Columbia, DC
- Florida, FL
- Georgia, GA
- Hawaii, HI
- Idaho, ID
- Illinois, IL
- Indiana, IN
- Iowa, IA
- Kansas, KS
- Kentucky, KY
- Louisiana, LA
- Maine, ME
- Maryland, MD
- Massachusetts, MA
- Michigan, MI
- Minnesota, MN
- Mississippi, MS
- Missouri, MO
- Montana, MT
- Nebraska, NE
- Nevada, NV
- New Hampshire, NH
- New Jersey, NJ
- New Mexico, NM
- New York, NY
- North Carolina, NC
- North Dakota, ND
- Ohio, OH
- Oklahoma, OK
- Oregon, OR
- Pennsylvania, PA
- Rhode Island, RI
- South Carolina, SC
- South Dakota, SD
- Tennessee, TN
- Texas, TX
- Utah, UT
- Vermont, VT
- Virginia, VA
- Washington, WA
- West Virginia, WV
- Wisconsin, WI
- Wyoming, WY
6. Can You Get a Partial Cash Payment?
Trucks (and sometimes higher value autos and boats) may sell for a significant price. In these cases, by working with the right charity you may be able to receive a partial cash payment (when your truck is sold) and still be able to make a sizeable tax deduction.
The IRS sets out this possibility in publication P544. You are interested in the section on ‘bargain sales’.
In short, when the truck is sold, you will receive an agreed proportion in cash which must be declared to the IRS. On your tax return, however, your tax deduction will not be the actual sale value achieved as described above. Instead, your tax write-off will be equal to the sale value less the partial cash payment you have received.
One such charity that operates this way is www.actiondonation.org.
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