Parents generally continue to help take care of their children even after their children are grown. Donating a car to you kids is a way to help them that will also help you. The Internal Revenue Service allows you to give tax-free gifts to the people in your life up to $13,000 yearly. This gift can be in cash or items. As of 2009, donating a car to your children--as long as it has a value of $13,000 or less--is a way to help them and lessen the value of your estate will help your heirs avoid the estate tax.
Appraise the car's value. You can get a free appraisal online using the Kelly Blue Book website (see Resources). If the car appraises at more than $13,000, any value over $13,000 must be declared as a gift to the IRS.
Sign the back of the title transferring ownership to your children. If you are donating the car to more than one person, all of their names should be listed.
Ask your children to contact their insurance agents to have the automobile added to their policies. If there is more than one person involved in the ownership, one of them will add the car to a policy--or take out a new policy for the car--and the other should be listed as driver of the vehicle.
Send the child who added the vehicle to their insurance to the tax assessor's office in the county where he lives with the signed title. The cost to register a vehicle varies depending on the state.
Unlike donating a car to a non-profit charity, donating a car to your children does not provide a tax deduction for you.
Until the care is registered in your child's name, you will be held liable for damages or injuries if the car is in an accident.
- Unlike donating a car to a non-profit charity, donating a car to your children does not provide a tax deduction for you.
- Until the care is registered in your child's name, you will be held liable for damages or injuries if the car is in an accident.
Specializing in business and finance, Lee Nichols began writing in 2002. Nichols holds a Bachelor of Arts in Web and Graphic Design and a Bachelor of Science in Business Administration from the University of Mississippi.