Can you donate a car that doesn’t run?

Can you donate a car that doesn't run?

You’ve had your car for years. It’s gotten you to and fro to school, work, and generally anywhere you needed to go. One day it quits running on you and no matter what you do you can’t seem to revive it. You’ve blown something major and there’s little hope of you actually reviving the car — not with your budget. 

You consider just letting it sit there, but you know that’s out of the question. Over time the car will just collect dust and rust. You could always take it to a junkyard, but you know in your heart there has to be a better way to handle the situation.

You could always try selling it, but the likelihood of someone buying a car that doesn’t actually run for anything more than pocket change is slim. You could always donate it and help out a charity, but what could they do with a car that doesn’t even run?

If you think like this, you might be in for a big surprise. There are plenty of charities out there waiting to take your car off of your hands whether it’s running or not.

No matter what condition your vehicle is in, unless it’s been stripped right down to the metal frame, your vehicle still has some value. There are multiple advantages to donating a non-operational car. Not only will you be able to get rid of your old clunker, but you’ll also receive a tax deduction for your troubles. Plus, actually removing the vehicle from your property won’t cost you a dime. The charity will send a tow truck to take the vehicle away free of charge. 

How the process works

As we’ve established, even if your vehicle isn’t running it can still be donated and sold at auction where it still holds some value, even if it’s not a lot. In many cases, cars that no longer run are bought so they can be stripped of their usable parts and the remainder sold as scrap metal. Salvageable parts include engine parts, knobs, glove compartments, dashboards, and even doors. Anything and everything can be taken from the vehicle, making it valuable to the buyer. These parts can either be used for a project or sold as replacement parts.

Many 501(c)(3) charities will accept vehicles whether they’re running or not. However, call your charity of choice to double check. Some charities exclusively accept running vehicles only. In many cases, vehicles that are completely unsalvageable are turned away because they provide zero value.

If you’re uncertain whether or not your vehicle will be accepted by a charity, inform them of the state of the vehicle. Pictures are the best way to go about doing this, but you can also give an in-depth description of the vehicle. If you’re denied, don’t give up hope.

Simply try another charity. Where one charity might not see any value, another may take a crack at selling it at auction. It certainly doesn’t hurt to try another option!

Claiming your deduction

Claiming your deduction

Once the vehicle has been sold it’s now a matter of claiming your deduction. Whether the vehicle is running or not, this process is the same. 

The current IRS tax law states that if a vehicle sells for more than $500, typically in an auction setting, your car donation tax deduction will be equal to the gross sales price received at the auction. The gross sales price is the winning bid at the auction. This price is calculated before any expenses are deducted (such as auction fees).

If the price of your vehicle exceeds $500, the charity will give you a letter that has all of the information required by the IRS. This includes:

  • Charity name
  • Address
  • Tax ID #
  • Car description
  • VIN #
  • Sales price
  • Name
  • The donation and sales date for the vehicle

When you send in your tax return send in this information and you’re set to go.

Now, if your donated vehicle is sold for $500 or less you can deduct the fair market value of the vehicle up to a maximum of $500, as outlined by the current IRS tax law. In most cases, if your vehicle goes for $500 or less, you will be entitled to a $500 deduction.

You will also receive a tax letter for this transaction as well which will indicate your vehicle was sold for $500 or less and will include all of the information required by the IRS:

  • Charity name
  • Address
  • Tax ID #
  • Car description
  • VIN #
  • Sales price
  • Name
  • The donation and sales date for the vehicle

That’s all there is to it.As long as the damage to your non-operational vehicle isn’t too extensive, you can still reap the same tax benefits as a donated vehicle that’s fully operational.

Featured image credit: Wikipedia

In Post Image Credit: lcb / Pixabay

2 responses to “Can you donate a car that doesn’t run?

    1. Yes, we can pickup cars that don’t run because of engine and transmission problems. But in most cases they must still be intact and installed in the car.

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