Do I get a tax deduction if I donate my car to charity?

Answer 1

The 3 answers before mine are all correct. The charity needs to sell the car and you can write off whatever they sell the car for. For the most part, this amount is far less that what people used to claim for cars. They'd donate junkers and claim prime value. Now, these junkers need to be sold by the charity before you can claim a deduction. Rarely do they get sold for full market value. You don't have to wait for them to sell the car if they decide to use it themselves. Or, if you claim $500 or less for the value of the car, you don't have to wait for them to sell it. Look at Publication 17 from www.irs.gov.

Now, the donation value goes on Schedule A as a "write-off". If you don't normally use a Schedule A, you may find that, even with the donation added to the Schedule A, the total on your Schedule A may not exceed your Standard Deduction. You see, you get a standard deduction whether or not you do a Schedule A. The Schedule A only is needed when it exceeds the Standard Deduction. For example, if you are single, your Standard Deduction is $5000. If everything else on Schedule A is $4000, then the first $1000 of car donation won't change your taxes AT ALL! Beyond that, you only save your tax rate in taxes. That means, in the above example, if the value of the donation is $3000, $2000 will count towards taxes and, if you are in the 25% tax bracket, that $2000 will only save you $500 in taxes. In this example, you gave away a car that you could have sold for $3000, and you only benefitted $500 in taxes!

It is very common (I do a lot of tax returns each year) for people who have a relatively low income level with no home mortgage interest to have absolutely no tax benefit at all for donating a car to charity.

Bottom line: If your main goal is to help out the charity, and you don't want the hassle for selling the car yourself, by all means, donate your car and keep records and hope it helps your taxes. If your main goal is your financial benefit, definitely sell the car yourself. Even if you think you won't get much, I guarentee it will be a lot more than what you save on taxes. If your altruistic side kicks in, you can donate part of the proceeds to a charity.

Good luck :)

Answer 2

If you're itemizing, the tax benefit to you, will be that value that the car was sold times the percent that's your tax range. Unfortunately there is not tax benefit from it in case you don't itemize :(

I received all information from the charity that I used for my donation but if your charity does not offer such information I recommend to visit http://taxdeductions.cardonatehelper.org

Use the search box if the information you are looking for are not displayed immediately.

Have fun with your research and even more with the results of your donation!

All the best

Tarsha
It's Official: Sharing Makes Us Happier!

Answer 3

All of the above answers are correct IF the charity sells the car. If the charity USES the car, you can deduct the Fair Market Value on the date of the donation.

Answer 4

It use to be that you could take high Blue Book for your vehicle as a tax write off but in 2005, that law was changed. Now, when you donate your vehicle, you'll receive a gift receipt with no value. You cannot claim anything on that vehicle until you receive a letter from the charity stating how much they received for the car at the time it was sold. That's the only amount you can claim now. It's a gamble but if you're not desperate for the write off, it's definitely a good thing to do!

Answer 5

Yes, when they notify you of the amount they recieved for the car. But to recieve a tax write, you need to file an itemized deduction tax return - which is much more in depth then the EZ forms most people file. It's benifitial to do this usually if you own a house, have kids, or have a lot of charitible donations.

Answer 6

Cars, Boats, and Aircraft
If you donate a car, a boat, or an aircraft to a charitable organization, its FMV must be determined.

Certain commercial firms and trade organizations publish monthly or seasonal guides for different regions of the country, containing complete dealer sale prices or dealer average prices for recent model years. Prices are reported for each make, model, and year. These guides also provide estimates for adjusting for unusual equipment, unusual mileage, and physical condition. The prices are not “official,” and these publications are not considered an appraisal of any specific donated property. But they do provide clues for making an appraisal and suggest relative prices for comparison with current sales and offerings in your area.

These publications are sometimes available from public libraries or at a bank, credit union, or finance company. You can also find pricing information about used cars on the Internet.

An acceptable measure of the FMV of a car, boat, or airplane donated after June 3, 2005, is an amount not in excess of the price listed in a used vehicle pricing guide for a private party sale, not the dealer retail value, of a similar vehicle. However, the FMV may be less than that amount if the vehicle has engine trouble, body damage, high mileage, or any type of excessive wear. The FMV of a donated vehicle is the same as the price listed in a used vehicle pricing guide for a private party sale only if the guide lists a sales price for a vehicle that is the same make, model, and year, sold in the same area, in the same condition, with the same or similar options or accessories, and with the same or similar warranties as the donated vehicle.

Example.

You donate a used car in poor condition to a local high school for use by students studying car repair. A used car guide shows the dealer retail value for this type of car in poor condition is $1,600. However, the guide shows the price for a private party sale of the car is only $750. The FMV of the car is considered to be no more than $750.

Boats. Except for inexpensive small boats, the valuation of boats should be based on an appraisal by a marine surveyor because the physical condition is so critical to the value.

More information. If you donate a car, boat, or airplane after 2004, your deduction generally is limited to the gross proceeds from its sale by the qualified organization. This rule applies if the claimed value of the donated vehicle is more than $500. In certain cases, you can deduct the vehicle's FMV. For details, see Publication 526.

Answer 7

Get a receipt from the charity. When they auction the car off, they will tell you how much they got for the car. When you do your income taxes, deduct that amount as a charitable contribution.

Answer 8

Yes, just get a good reciept for your car. Make sure title work is filled out properly and you are done!