Hello and Welcome to Your Car Donations Blog, I hope you find the answer to your questions here.

Like many other things that have changed since 2000 in Florida, vehicle donation agents have found themselves with far less latitude.  In fact, many companies have given up on taking donations in that state, though many who left were not serving legitimate charities anyhow.  When threatened with an investigation by the State Attorney General, most such companies simply focused their efforts elsewhere.

In Florida, vehicle donation agents do continue to operate on behalf of real 501 c(3), non-profit organizations (NPOs).  To apply for non-profit status, a charitable NPO must prove to the IRS that they are serving the public good (as narrowly defined in the tax code) through an educational or service oriented mission.

Additionally, Florida’s vehicle donation program regulations require that each such company be registered at the state level, pledging what charitable NPOs they work for, complete with exempt tax ID numbers.  Many such companies that have made the transition since federal laws changed in 2005 are also registered with the Better Business Bureau or some such organization.

Because there are so many older people in Florida as well as a great many people in need of vehicular services Florida’s vehicle donation services are a very important component of many different charitable organizations.  For instance, there are more Meals on Wheels services in Florida than just about anywhere else, depending upon the county.

This means that cars that are in good working order (and the ones that receive the highest amount of allowable tax deduction) can easily be matched with a charity that could really use it.  In Florida, vehicle donation is also fueled by the large number of “little, old ladies” who have very nice (low miles!) cars they can no longer drive.  Many of these vehicles are donated, perhaps because their owners are now relaint upon such services.

Regardless of the reasons, one is in a position to get the fair market value of their vehicle as a tax deduction (sadly, not a credit to their total tax that tends to be about three times as valuable) in Florida.  Vehicle donations here are very often of actual vehicles rather than junker cars that are then scold for scrap on the wholesale market.  However, in other parts of the country, this is far more likely.

On the other hand, when you’ve got a perfectly good, running car that you’d like to donate in florida, vehicle donation levels are such that your car may not be good enough to compete with your neighbor’s old Cadillac.  Therefore, many cars that would be perfectly usable in other markets end up on the wholesale lot in Florida.

Vehicle donations, though still down (as they are in the rest of the country since 2005, are higher in Florida than the rest of the country.  However, if you are a winter-only visitor, don’t think that you have to donate your vehicle in Florida to have it go to a good use.  Indeed, if your car needs some minor repair to make it safe and functional for use, a little looking around back in your home state will find low-income people who need your car to help them get out of poverty.  In Florida, vehicle donation programs sometimes reject such cars for use.

If that wasn’t reason enough to carefully consider all your options as a Snowbird, a car that is sold on the wholesale market can net as little as 5% of what might be the “fair market value” of the car, as if you were to sell it yourself through a classified ad.  Therefore when presented with wholesale prices in Florida and vehicle donation to an educational charity that provides cars to needy folks up north, the larger benefit is obvious.

Of course, regardless of your location, you’ll need to have a free and clear title.  In Florida, vehicle donation laws require you to sign the title over.  If the vehicle is to be turned into scrap, either you or (more likely) the company that tows your vehicle away, will need to file an application for a demolition title.

As a general rule, there is no reason you should have to pay any fees when dealing with a for-profit agency.  If donating directly to a charity, you may elect to also donate the fees they need to pay to get the car in the hands of a needy individual, though they usually take care of it, too.  Florida vehicle donation laws are generally designed to allow charities to continue their good work while taking the profit motivation away from the unscrupulous companies that once thrived in the state, actually preying on needy populations.

Even though the laws were changed in 2005 to reduce the incidence of perfectly legal “tax fraud,” there are still some situations where you may claim the “fair market value” of your car, truck, boat, RV or trailer when you donate to a legitimate charitable non-profit organization (NPO).  However, the rules governing what is “fair market value” have also changed.

Until it was clarified, many people (and paid tax professionals) thought this meant taking the “fair” amount from the Kelley Blue Book (or a similar estimation service), regardless of the actual condition of the vehicle.  The IRS had different ideas about just what that was when they wrote the statute, but the wording was less than clear.  The fair market value clause cost the IRS an estimated $640 million in 2000.

Also, consider what shape the vehicles donated by middle-class Americans are actually in when their owners finally consider donation.  Such vehicles are very often in less than “poor” shape.  Many third-party, for-profit companies that acted as agents for charities were taking cars whether they ran or not (and advertising as such).  The owner got to avoid a fee at the scrap yard, let someone else pick the car up for free and claim the fair market value as a tax deduction.

However, taking the actual fair market value of your vehicle is where the IRS noted the discrepancy.  Not only were the agents skimming as much as 70% of the sale price of each vehicle right off the top in legitimate (though sometimes dramatically padded) “service fees,” but the difference in real worth became apparent at the point of sale.  Since most of those cars ended up on the wholesale market, the price difference was even more acute.

Even the “poor” rating in the Blue Book requires a running car.  Clearly there was a big difference between what these cars would fetch if someone put an ad in the paper and their fair market value, as someone who’d taken economics classes would understand the term.  The laws were changed in 2005 to require a receipt of any gift valued over $250 as well as a written satement of what the car actually sold for (over $500) or what use it was put to.  Therefore, if the car is sold as its first use after donation, you will only be able to claim the amount of the sale price that was actually given to the charity.

However, if the vehicle is used, as is, you may deduct the real fair market value – the price you can actually get for the vehicle if you were to go ahead and sell the car yourself.  If the car is actually used as a car by a needy individual, your deduction can increase as much as 10-fold versis sold on the wholesale market.

If at any point in the first two years after you donate a car to charity, the car is subsequently sold, the charity will have to send you another receipt (actually a Form 8282) letting you know what happened to the vehicle.  You don’t have to change anything on your taxes, whether you’ve filed them yet or not.  If it was legitimately used for any length of time, you may claim the fair market value of the car when you donated it.

In fact, to back up your claims and justify the fair market value of your car that you’ve chosen, it is often a good idea to take pictures of the vehicle, inside and out.  If the vehicle is valued at over $5,000 you’ll need a independent appraisal (in writing) to confirm your fair market value calculations.

If the car is to be fixed up and sold, you may also claim the actual fair market value of your car, as it was when you owned it, if the vehicle is repaired to such an extent that it may be sold for more.  You are still allowed to claim as much as you could have gotten if you’d placed a classified ad.

Though the concept of fair market value does still allow you to claim values that assume perfect selling conditions.  However, in the real world, many people price old cars to make them sell quickly, so consider what you could actually get for it if you tried.  You can assume a small advertising budget.

Whether you’re a prospective donor or a charity that has just been given an offer you can’t refuse, you’ll want to go out of your way to inspect a donation car for safety as well as functionality.  Ideally, as  a donor, you have a pretty good idea about the true condition of your car and what it needs to be safe for travel.

Sometimes this can involve a bit of work, but if you know exactly what needs to be performed, it might make the task seem a bit less daunting.  Since you’ve probably taken the car in for evaluation before deciding to switch to a different one, you have a pretty good chance of knowing what’s going on with your donation car before you even dial up your favorite charity.

Of course, if it’s been sitting out for awhile, you’ll want to make sure it at least does as much as it did before you set it aside.  In many climates, fuel left in the gas tank for more than a few months, without some sort of treatment beforehand, can result in a gumming up of the engine (the fuel vapors actually turn to varnish on the formerly moving parts) that takes a great deal of time and labor to overcome.

This sort of malfunction that requires a great deal of time and effort to correct, rather than a bunch of money, is a good candidate for a charity program that teaches people about auto service as part of the charitable mission.  If the donation car also happens to be in good shape otherwise, the odds of such an automobile being repaired and given away are pretty good, especially if you’re working with a local non-profit directly.

Of course, if you live in a state where you must pass emissions testing to purchase your registration tags (or new plates), you want to check to see if donation is a car that’s even legal to drive without further work.  It is unfortunate that so many of the cars given to charity are gas guzzlers when the price of gas goes up.  Regardless, you can at least make sure they’re not spewing fumes.

You should check to make sure all the lights work, the battery can take a charge, and there’s at least some rubber on the tires.  Generally you want to make sure if there’s anything wrong with your donation that could cause someone who has enough problems to be very seriously inconvenienced with your donation.  A car mechanic that works for a charity or a class of students will be going over a list of their own, but it’s good to let the charity know just what they’re getting into when you call so they can make a decision.

Of course, it’s good to know that the breaks are intact and that the accelerator doesn’t stick.  Again, this has a major impact on how the charity (or third-party agent) will ultimately use your donation.  Cars that have very little value or are dangerous in some way, are very often sent to the wholesale market as parts cars.  Again, it’s important you not keep information that could endanger anyone’s life to yourself.

As for the real-world functionality of your donation, a car must also have a free and clear title to be transferable.  In some states you can request a duplicate title be sent to you in the mail, though it sometimes takes several weeks to get the process rolling along with a call for a tow truck.

When you call to begin the process of donation, a car and truck specialist will get a good idea for what needs to happen to your car.  If it’s decided based upon the condition and usefulness of the car that it should be saved, a charity that will return it to good working order.  Otherwise, you can expect to to become parts.  Rarely are cars simply crushed for their metal, though this is sometimes done in severe cases.