Car Donation In Rhode Island, RI
What You Need To Know
Car donation in Rhode Island is a legitimate way to take the burden of selling a car off your hands while, at the same time providing necessary resources for a charity to continue its good work.
However before you donate your vehicle you should check all applicable state laws.
If you are thinking about making a car donation in Rhode Island, you will find all the answers to the most important questions you are likely to have below.
1. What Can You Donate In Rhode Island?
If you have a car for donation
that’s just fine, but you have the opportunity to donate a slew of different vehicle types in Rhode Island.
For instance you could donate motorcycles, mopeds, RVs‘, SUVs, trucks (see truck donation), recreational vehicles, off-road vehicles, all-terrain vehicles, jet skis, boats, trailers; essentially any sort of vehicle that is legal to use in the United States.
Ask Your Charity First
If you’re ever unsure about whether or not your vehicle would be accepted, simply call the charity and ask whether or not it will take your donation when you bring it in.
2. How To Release Liability In Rhode Island?
Regardless of your car donation value
you need to make sure that you are released from your liability concerning your donation.
Liability is the amorphous, legal concept that you are responsible for the vehicle you own, and thus accidents, damages and injuries involving it are also your fault.
In order to transfer the liability to the charity along with the physical ownership of your car you have to fill out the title, listing the charity as the official new owner of the vehicle you donated.
If you need to get a replacement title for your vehicle, you will need to contact the Rhode Island DMV in Cranston, as this is the only location where replacement titles are issued. You will need to download and complete Form TR-2/Tr-9, Application For Title in Rhode Island. There is also a fee to be paid.
Note that you can only apply for title if you are the legal owner and there is not outstanding loans on your vehicle. If you are still in the process of paying back your loan, the lienholder can apply on your behalf.
Consult the section on Rhode Island vehicle titles at the DMV website for more information and instructions.
3. What Documents Do You Need To Donate?
When you donate a car to charity you need to have the title to that car so that you can hand it over.
Additionally, some charities will allow you to donate a car for cash, or at least for a partial cash payment. This is done with particularly expensive vehicles, and you must declare the cash payment on your tax forms, but when dealing with vehicles in that price range you’ll definitely need the title to prove that it is your vehicle to donate in the first place.
What You Must Do
The DMV states the following on it’s website:
“You must also give the new owner a bill of sale. The bill of sale should include all the basic information about the car, such as year, make, model, VIN number, color; it must also include the purchase price. You need to sign the bill of sale and furnish your address, as the new owner will have to supply that information on the registration application when he registers the car.”
For all questions regarding your title and the title transfer process, contact the Rhode Island Division of Motor Vehicles.
4. Where Can You Donate Cars In Ri?
Whether you choose a private car donation program
or a charity car auction
in Rhode Island you have to research the organization you’re turning your vehicle over to before you fill out your title and hand over the keys.
You need to be sure that the charity in question is an acceptable, 501(c)(3) charity in order to claim your tax deduction.
The Better Business Bureau has put together a searchable list of charities at www.bbb.org as has charitynavigator.org. There may not be too many registered charities in Rhode Island, given its relative tiny size, and hence it may be better to look towards other nearby states should you be looking for a worth cause.
Rhode Island Towns/Cities
Once you’ve chosen your charity all you have to do is call them and ask where in Rhode Island you have to take your vehicle in order to donate it.
Donations In Nearby States
5. How To Maximize Your Charity’s Donation?
Car donations to charity allow you to take a deduction on your taxes, but for a charity they are bread and butter in some instances.
As such, if you want to really help your charity out it’s important that you take steps to insure that it gets as much for your donation as possible.
Present Your Car At Its Best
For instance, you should clean and tune up your vehicle before you donate it to save the charity the work and time of doing so.
Make any improvements to the vehicle that you have to make that will increase the sale value before handing it over. Also, if possible, drop the vehicle off yourself in order to save the charity from paying the cost of the tow.
6. How To Maximize Your Tax Reduction?
When you give a car to charity you may claim a car donation tax break
when it comes time to do your taxes.
Normally when you donate a vehicle to charity the charity will sell that vehicle at auction and then you may claim the gross proceeds of that sale as your tax deduction.
Claiming Fair Market Value
However, a charity that uses your vehicle for a significant period of time in the course of its charitable activities, or that gives your donation away for free or which sells it at a price far below fair market value in furtherance of its goals (i.e. to a needy person) allows you to claim the fair market value of your vehicle on the day you donated it.
Some charities will give you a partial cash payment as well, but that payment must be deducted from the gross proceeds of the sale on your Federal tax return.
The IRS explains this in IRS Publication 544, Sales & Other Dispositions of Assets.