Excellent information page concerning aspects of tax deductions when you donate a car 2 charity.
Please read this page.
| Fair Market Value | Tax Deductible | Itemizing Taxes | Tax Benefit | Donation Proof |
How to Determine the Fair Market Value When you Donate a Car.
Follow these simple steps and you can find out the fair market value of your donated car.
- Click on either of this link to go to the Kelley Blue book site. Clicking on this links will also launch a second browser window so you can read these instructions in one window and apply them in the other.
- On the first page in the top left paragraph, called "What's My Blue Book Value?" click on the link called "Private Party Value".
- On the page that comes, up click on the Year of your car.
- On the next page that comes up, click on the Make of your vehicle.
- On the next page that comes up, click on the exact Model of your vehicle.
- On the next page that comes up there are a series of boxes requiring information. In the top box you are asked for things like the type of engine or whether automatic or manual transmissions, etc. Check these correctly according to your car.
- In the next box (down) you need to fill in the Mileage of your car and your Zip Code.
- In the next box you need to check off the various Options that apply to your car. These are things like Power Steering, air conditioning, cruise control, etc. etc. Check all that apply.
- The bottom box is entitled Select Vehicle Condition. Choose "Rate It" or "Help Me", which is the last box on the right. Kelley Blue Book has changed the name of this button a few times, but it is always the last button on the right and when selected allows you to give a very detailed "rating" of your vehicle.
- This is important in order to accurately get the Fair Market Value for your vehicle.
- After choosing "Rate It" or "Help Me" click on the bottom button called, "Get Pricing Report". This takes you to another page.
- On this page you rate the following: Exterior Condition; Interior Condition, Mechanical Condition, Miscellaneous. Each of these categories has several aspects of the car's condition to rate. There are usually 3 columns for each of these aspects. Choose one rating for each. Do not skip any of these. You will thus fully rate your car.
- When this is done click on "Get Pricing Report" at the bottom of the page.
- This takes you to a page that gives the Private Sale Value for your car rated exactly as it is, in its current condition. You should print this page for your tax record.
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Are all donated cars tax deductible?
All cars donated to charitable organizations granted tax exemptions under section 501 (c) (3) of the Internal Revenue Code are tax deductible.
WARNING: Not all charitable organizations have been granted tax exemption under section 501 (c) (3) of the Internal Revenue Code. We would advise you to read what is stated by any charity donation site.
The IRS has granted tax exemption under section 501 (c) (3) of the Internal Revenue Code to all of the charities with which we work.
IRS Tax Information
IRS Publications and Adobe Type Reader
The publications on the IRS website are now in a viewable and printable form that require Adobe Type Reader to view and print. If you do not have this tool you can obtain it at the following link: http://www.adobe.com/products/acrobat/readstep.html. Acrobat Reader is free.
Link to IRS Website
Here is the link for the IRS website: http://www.irs.gov/.
Fair Market Value and Publication 526
For information about determining the "fair market value" of a vehicle you can read "Publication 526 Charitable Contributions". This link is at http://www.irs.gov/pub/irs-pdf/p526.pdf. You can read the entire publication or you can start at page 7 of the document. Be sure to read the section entitled "Contribution of Property" and a section called "Determining Fair Market Value" and there is another section called "Cars, boats, and aircraft." This gives very specific information about that type of donation.
Fair Market Value and Publication 561
There is another IRS form that is pertinent, that is Publication 561. The publication is entitled, "Publication 561 Determining the Value of Donated Property". You can find that publication at http://www.irs.gov/pub/irs-pdf/p561.pdf.
IRS News Release
IRS AND STATE CHARITY OFFICIALS URGE CARE WHEN YOU DONATE A CAR
IRS Tax Form for filing taxes -- Form 8283
There is a tax form that you will need when you fill out your return. It is form 8283. You can find this form at the IRS web page http://www.irs.gov/pub/irs-pdf/f8283.pdf. The instructions for this form can be found at http://www.irs.gov/pub/irs-pdf/i8283.pdf.
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Itemizing Taxes - Do I need to itemize deductions?
If your primary motivation in donating an automobile is to gain a tax deduction you will need to itemize your deductions on your Federal and State Tax Returns.
If currently you are not itemizing your deductions on a Long Form, your accountant would be able to tell you if making a vehicle donation would justify switching to itemizing your yearly deductions and using the longer form.
If you cannot receive any tax benefit we can still arrange free pickup and we can arrange for you to receive other valuable benefits through a recycling program. For more information on the Car Recycling Program.
Donate car 2 charity will provide you with the needed IRS tax form 8283 if requested or you can print it directly from the IRS website as described above.
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Does the new tax law affect how much I can deduct on my 2005 income tax return?
Thanks to the new tax law, the IRS has taken the guesswork out of how to determine the value of your vehicle.
Beginning January 1, 2005 you may deduct the full price we receive for the sale of your vehicle. This greatly simplifies the process for you in several ways:
If your vehicle sells for more than $500 you’ll know exactly the amount you may deduct, eliminating guesswork. Thus you no longer have to research and come up with an estimate of the fair market value of the vehicle.
This also eliminates the risk of you getting into trouble by overstating the value of your deduction on your tax return.
This saves you both time and risk.
Here is how it works:
Under the new law, if your vehicle sells for $500.00 or more at the dealer auction house, we are now required to send you a receipt containing the following information:
Your name and the VIN of your vehicle;
The fact the donation was "arms length", i.e. that we are not related to you in any way, family or business-wise;
The selling price of your vehicle becomes its fair market value.
This makes the entire procedure very simple for you. And eliminates any risk from the IRS.
If you car sells for less than $500.00 at auction, you may deduct what you consider as the fair market value of your vehicle, as long as that figure is under $500.00.
In this case, we will be sending you a less detailed tax receipt that simply acknowledges your donation (with your name, date of your donation, and the description of your vehicle).
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What proof do I need for my deduction of my donated car?
You will need a tax receipt with a 501 (c) (3)'s name and Federal Tax ID number on it verifying the date, the year, make and model of your donated car.
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