• You can put that old jalopy to good use by donating it to a worthwhile charity. Many nonprofit organizations use proceeds from the sale of donated vehicles to fund their work, including the National Kidney Foundation and the Order of the Purple Heart. You can also get a substantial tax deduction provided you itemize your taxes and follow IRS requirements for donating a car.
  
  

Qualified Charity

• For a car donation to be tax deductible, the receiving organization must be considered a qualified charity by the Internal Revenue Service. To determine if an organization is qualified, check IRS Publication 78: Qualified Charities. Some qualified institutions such as churches, temples, mosques and synagogues are qualified but not required to register with the IRS. These might not be included in Publication 78.
  
  

Title Transfer

• Title to the vehicle must be legally transferred. The transfer procedures are set by individual states, but in general, you must fill out the title transfer section of the vehicle's title. You and the representative of the charity must sign it. In some states, the signatures must be notarized. You might also have to include a disclosure of any serious problems or defects the car has.
  
  

Documentation

• The receiving organization is required to give you an acknowledgment statement within 30 days of selling the car. This document will state the price for which the car was sold. This documentation is necessary for you to be able to deduct the donation from your taxes. You will get a receipt when the car is picked up, but this is not sufficient documentation for tax purposes.
  
  

Valuation

• The sale price of the car is used as the value for tax purposes. There are two exceptions. If the car is sold for less than $500, you can use fair-market value up to $499. Also, if the charity keeps the car for its own use or makes major repairs, you can substitute fair market value for the sale price. If you can use fair market value and the amount is more than $5,000 you must have a written appraisal.
  
  

Filing

• To take a car donation as a tax deduction, you must fill out IRS Form 8283: Charitable Donations and include it with an itemized tax return. Enter the value of the car in section A of the 8283 along with other charitable donations unless the car's value exceeds $5,000. In that case it should be listed separately in section B. Enter the total from Form 8283 Enter the total from Form 8283 on line 17, Form 1040 Schedule A.