If you are thinking of donating your vehicle to a registered charity, you might be interested in seeing an auto bill of sale sample used for these types of transactions. Unfortunately, there is no set template or receipt style that is used by charities. Furthermore, when you donate a vehicle to charity, you do not issue a regular bill of sale as you would to someone that simply purchased your car.
Paperwork Needed for an Auto Donation
When you choose to donate your car to a worthy charity, you only need to provide the organization with the title for the vehicle. To donate your vehicle, you simply need to sign over the title to the charity and report the transfer to your state Department of Motor Vehicles or equivalent agency. Some states have a form specifically for this purpose, while others may require you submit an affidavit of transfer. Some states require notarization and others do not.
IRS Requirements for a Bill of Sale
In January 2005, the IRS changed the way donated vehicles are valued. Before the change, you could claim the fair market value of the vehicle and have a bill of sale or donation receipt made out to you for that amount. However, many people claimed exemptions that were much higher than the actual value of the vehicle. Therefore, the IRS now places limits on deductions for vehicle donations. In fact, many times a tax deduction can now be rendered void if a bill of sale is made out by the charity showing a value greater than is allowed.
Now, in most cases, the charity will not provide the donation receipt to the donor at the time of the donation. Because many charities auction off vehicles, you will not receive a deduction amount for the vehicle until after it has been sold. The IRS allows charities up to 30 days to sell the vehicle and inform the donor of the sales amount (although it can take longer). The charity will then provide you with a form that lists the amount you can claim as a deduction on your tax return.
If the charity chooses not to auction or sell your vehicle, and instead uses the car for its charitable work, you may be able to claim the full fair market value as a deduction. Check with your tax accountant or advisor for more information.
Before you can complete the process of selling or buying a vehicle anywhere in the United States, you'll need to obtain an auto bill of sale form to document the transaction and provide legal proof of the sale. The bill of sale is the only legal proof that the sale took place, so it's important that both the buyer and the seller maintain good records of the bill and clean copies of it in their files. While there is a generic bill of sale form that works for many different states and serves as a personal legal form, there are also state specific legal bills of sale that you can obtain in order to document the sale with the state government and the DMV.
Visit the Local DMV
State specific bills of sale forms are available through your local DMV branch office. You can either request a copy of the state bill of sale in person, or you can go to your state's DMV website and print a copy.
Meet with the Other Party and Share Information
You need to have the other party involved in the transaction present with you when you complete the bill of sale. In order to finish the bill, you both have to fill out your names and addresses, telephone numbers and other contact information. Also indicate the make, model, year and VIN (vehicle identification number) for the car. State the agreed upon amount that the car was sold for, and finally, you both need to sign the bill of sale and date your signatures.
Retain Copies
After you've completed the bill of sale for your state, you both need to retain an official copy for your records. Because the bill of sale serves as the primary legal proof that the sale took place, it's crucial that you hold on to your copy even after the deal is completely done. You'll need to be able to present the bill as proof that you own or have sold the car, and you may need to provide it to your DMV in order to either re-register the vehicle under a new name and license plate or to transfer the title of the car over to a new owner.
Is a Used Auto Bill of Sale Required for Donations?
You plan to give back to the community and donate your car to a charity, but you are unsure about the used auto bill of sale, and red tape required when donating your vehicle as a gift. There are various tax benefits if you follow the correct procedure to give a gift to the less privileged, and there is no set template for an used auto bill of sale. This specific used auto bill of sale is not the same as a receipt for purchasing or selling a car. As the giver, you will hand over the title for the vehicle and sign it over. Then, report the transfer to your state Department of Motor Vehicles or equivalent agency. You may even have to get the car appraised before compiling the used auto bill of sale.
What Charities Offer a Bill of Sale Receipt after Donations?
Before donating your vehicle to a charity, investigate what they will do with your donation before requesting a bill of sale receipt. Some cars will be used as delivery vehicles or transport people and they can be claimed as a ta deduction. When vehicles are sold or auctioned for funds, charities can't calculate the amount or bill of sale receipt until after it has been sold. However, charaties are allotted about 30 days to sell and inform the donor about the exact amount at which vehicle is sold. The bill of sale receipt should be accompanied by a form that indicates how much can be claimed as a tax deduction.
How Does an Online Bill of Sale Work?
An online bill of sale is obtained on the Internet and can make the selling and donating process much easier for all parties concerned. This is useful for the buyer and seller to track negotiations and keep records without paperwork. An online bill of sale can be downloaded on Microsoft sites and filled in until both parties are satisfied. The other function of an online bill of sale is to advertise and sell the car on the Internet. Information such as the year, make and model of the vehicle and a description should be included in the online bill of sale, as well as the buyer and seller's names and signatures and prices.
