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Car Donation & Tax Deduction

Whether you've already donated a vehicle or you plan to donate your vehicle , it is important to review everything involved in your car donation tax deduction to ensure that you are getting the best deduction and that everything is filed correctly. There may be special rules that apply to specific vehicles 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 an auto 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 the said vehicle. Whatever the intent, you should always receive or ask for a written receipt acknowledging your gift to the organization. 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 used 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 should receive 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.

At Allstate Car Donations we work to make sure that you receive the most legal tax deduction from your charitable donation. Our skilled and knowledgeable team is here to assist you and answer any questions you may have regarding your car donation & tax deduction. You can be sure that we will be here to help you every step of the way to make sure that you receive the most benefit from your donation. Thank you for your contribution in helping us make a difference in people’s lives and for helping us get Americans back to work!

 

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