FundSvcs Community

 View Only
Expand all | Collapse all

Car Auction

  • 1.  Car Auction

    Posted 20 days ago

    Hi Wise and Generous Community –


    You may remember me as the person who asked about raffling a car a few weeks ago (eeeek!)


    We now plan to auction it off during a live auction. 


    Looking for advice on how to proceed with an email notification inviting participants to submit a proxy bid and the nuts and bolts of transferring the car to the winner.  Do we collect sales tax? Should my university take control of the title?  What are the IRS implications?


    Thank you very much!


  • 2.  RE: Car Auction

    Posted 20 days ago
    Reed, you will need to work out the car transfer details with your CFO.  But you cannot sell it if you don't own it.  So yes, the title must be in your name.  And if you don't own it there cannot be a charity auction.

    I do not know your internal accounting and asset transfer protocols.  I am guessing the CFO will follow similar guidelines as to when you have previously transferred any owned assets to other organizations or individuals.  The fact this asset is being sold via an auction will not affect those protocols.

    All charity auctions are subject to state sales tax regulations in states with state taxes.  However, most charities do not "collect" taxes from the buyers at a charity auction.  They pay the required taxes from auction proceeds.

    You will also want to talk to Counsel about any laws regarding conducting this "sale" online as interstate commerce laws.

    And both your CFO and Counsel will need to be involved in the proper execution of IRS Form 8282, assuming the vehicle in question was donated to you within the last three years.


    John H. Taylor
    John H. Taylor Consulting, LLC
    2604 Sevier St.
    Durham, NC   27705
    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987

  • 3.  RE: Car Auction

    Posted 20 days ago
    Adding to John's comments, you will be required to fill out IRS Form 1098-C if the car is worth more than $500. This form both acknowledges the donation of the car to you, and its subsequent sale in an arm's length transaction. IIf the car sells for less than FMV, it will also limit the car donor's deduction to the sale price.

    Note also that some states waive sales tax for nonprofits for fundraising events, under various circumstances. 

    Thank you,
    Isaac Shalev
    Data Strategy Expert
    Sage70, Inc.
    (917) 859-0151

    Schedule a 30-minute consultation now:

  • 4.  RE: Car Auction

    Posted 18 days ago

    Thank you, Isaac and John, for this helpful information.