Based on the amount you wish to claim as a charitable contribution deduction, you need to maintain certain files and records to manifest your charitable contributions. Following are the necessary recordkeeping and filing requisites that would be helpful.
Written Acknowledgement of the Charity
You should not forget to get an acknowledgement in black and white from the charity in case the amount you are going to claim is $250 or above. The receipt must indicate the name of the charity, a detail features (excluding value of your car) and any one of the under mentioned details – a declaration that no articles or services were offered by the charity to the contributor in return for the car donation, if it has been provided, a detail and valuation of the goods or services, if any, that the charity offered in return for the contribution, or a declaration that articles or services that the charity has given in return comprised of intangible religious use.
You should obtain the written declaration on or prior to the date you filing your return for the year in which you made the contribution.
Form 8283, Noncash Charitable
Contributions – You need to file an additional form with the IRS along with your Form 1040. If the deduction is more than $500, you should fill in Section A of Form 8283. In case the deduction you are going to claim is more than $5,000, you should obtain a written statement of your car. You need to complete Section B of Form 8283 as well, which should have the signature of some authorized personnel of the charity, and annex it to your return.
Written Appraisal – Your appraisal in writing should be of a qualified appraiser. The appraisal should not be 60 days old from the date of your contribution of the car. When filing your income tax return (Form 1040 or Form 1040X), you should fill up Section B of Form 8283, and annex it to your return.
If Section B is needed and the charity sells or disposes of a car in the initial two years after the date of receipt, the charity is liable to file Form 8282, Donee Information Return. The charity should offer a copy of the form to you.
State Law Requirements – Car Title
Usually, state charity officials expect the donor to transfer car title to the charity, and should inform the state motor vehicle office by changing the details on the donor’s car registration about any transfer or sale of the car. In certain states, a third party, for instance the charity’s agent, may be entitled to hold an open title or add a dealer’s name. Prior to donating the car, you should take off the license plates, unless it is required by the state law. This would enable you avoid any liability issues after the car is transferred.
Assistance through the Charity, Through State Officials, and Through the IRS Charity
A charity has to be open for public investigation of its application for tax exemption, its determination letter, and the latest annual information returns (Forms 990). A charity should also provide copies of all these documents on request. A charity may or may not charge you for reviewing the documents.
State Charity Official Assistance
Many states ask charities, getting contributions, to register and file specific documents with a state charity regulator, like the secretary of state and the state attorney general. Several of the state charity personnel offer useful details about charities and fundraisers in the form of web sites and brochures and publications.