Car for Charity Alabama

When donating a car for charity in Alabama, it is best to follow the rules. Doners will still be able to help their favorite charity and receive a tax deduction, but how large a deduction is dependent on what the vehicle is used for by the charity.

Charitable Donations

What once was a novel way to raise cash for non profit organizations is now done by just about every charity everywhere, including Alabama. Before you donate a car there are things you need to do and questions you need to ask.

Call your charity and ask about their car for charity Alabama program. Do they accept the donation directly or have they contracted with a third-party seller to dispose of the car?

This is important to know. Third-party sellers are for-profit services and the charity receives only a percentage of the sale of the vehicle or a flat fee. It is important to speak to both the charity and the re-seller and determine exactly how the program works. For example, a flat fee arrangement could remove the doner's eligibility to claim any type of tax deduction.

Make sure the charity is registered as a 501(c)(3), tax exempt organization. Ask for a copy of the organization's determination letter or visit the local IRS office. Check out the charity with the Better Business Bureau, with Charity Navigator, and, if they are a member, with the local United Way or a government regulatory agency.

Please note: Churches may not always have a determination letter. Check with the regional or state head of the church to ask for and receive a letter confirming the church as part of a recognized religious organization.

When it comes to donating a car, the Internal Revenue Service has some great publications to aid potential doners.

Although there are exceptions and special cases, these are the basic rules:

• Before donating a car or cars for charity in Alabama, check with the Alabama Department of Motor Vehicles. Make sure both the title and license are clear.
• Make sure you transfer the car correctly to the charity. Sign your car over using the title to a legitimate car for charity Alabama. Do not leave the assignment of ownership papers blank as you could incur liability for any traffic incidents including parking tickets the charity might occur, especially if they give it to a person who does not bother to register the car. A request by the charity to do something like this is shady to say the least.
• Take photos of your car and note any recent upgrades and/or repairs.

Keep in mind that people donating a vehicle to a legitimate charity may only deduct the fair market value up to $500. If claiming a car donation equal to $500 or more you will need to complete and attach IRS Form 8283 to your tax return. If you claim a donation of $5,000 or more, you will need an official professional appraisal to verify your claim.

Be aware that IRS law states that the deduction amount is determined when the car is sold. Doners receive a receipt stating the sale amount. Always use fair market value in the following situations:

1. The charity keeps the car for organizational use.
2. The charity must make repairs to the car before they sell it.
3. The car is sold to a low-income person at a reduced price.
4. The car is worth less than $500.

The IRS is very strict about this and watches claims closely.

For additional information, check out the IRS's Car Donation Guide and Donation Wizard Alabama

• Tracking Charitable Donations for Taxes
• Fundraising Strategic Plan
• Request for Donation Letters

• List of Nonprofit Organizations
• Furniture Donation Pick Up
• Sample Letters Asking for Donations
• Samples of Non Profit Fundraising Letters
• Samples of Thank You Letter for Donations

• Oprah Winfrey Giving to Charities
• Donate Used Furniture
• Salvation Army Pick Up
• Charities Which Accept Automobile Donations
• Salvation Army Valuation Guide