More about Deducting a Vehicle Donation

Whether you've already donated a vehicle or you plan to donate your vehicle, it might do you well to review all that is ultimately involved in the car donation tax deduction. There may be special rules that apply to vehicle and car donations. It all depends on what tax form you use, the amount to be deducted and what the qualified vehicle donation charity does with the vehicle. You can deduct contributions to a charity or non-profit organization for a vehicle donation if you itemize on Schedule A of Form 1040. If the non-profit or charity sells the donated vehicle, the deduction claimed by you the donor cannot exceed the gross proceeds generated by the sale of said vehicle. Whatever the intent, you should receive or ask for a written receipt acknowledging your gift. This receipt will detail relevant tax information for the non-profit or charity in question, establishing its legitimacy as a functioning non-profit or charitable organization. This receipt should also detail vehicle information including the amount your vehicle donation was sold for or auctioned off at. This amount is the amount of your deduction. If your deduction is $500 or more, you must attach Form 1098-C to your return. Form 1098-C details Contributions of Motor Vehicles, Boats, and Airplanes. You must also attach Form 8283 to your return. Form 8283 addresses Non-cash Charitable Contributions. Generally speaking, you can count the amount that is your donation automobile's fair market value instead of the amount that ended up being the gross proceeds from sale or auction if any of the following apply:

• The claimed deduction is $500 or less.
• The organization is able to use the vehicle in its current state or is prepared to make repairs to improve operability of the vehicle.
• The organization further donates or sells the vehicle to a needy individual at a price significantly below fair market value. This being done to further said organization's charitable mission to assist the poor, the distressed or the underprivileged by providing transport means.

When you donate a car and want to itemize the deduction, the fair market value cannot exceed the private party sales price listed in a used vehicle pricing guide.

All of this bears double-checking with the Internal Revenue Service to make sure you get the most mileage out of your used car donation, so be sure to consult the IRS for your particular situation.

Auto Donation Charity