0

Determining the Value of Your Car for a Tax Deductable Donation

Determining the Value of Your Car

The maximum amount you can deduct on your income tax return is the fair market value of your car. Fair market value is the price a willing buyer would pay and a willing seller would accept for the car, when neither party is compelled to buy or sell, and both parties have reasonable knowledge of the relevant facts.

These comments are pretty vague, so make sure that you read more about this below
.
Some fundraisers have mistakenly claimed that donors can, in all cases, deduct the full value of their cars as found in a used car guide (such as “blue book” value). A used car guide may be a good starting point to value your car, but you should exercise caution. The IRS will only allow a deduction for the fair market value of the car, which may be substantially less than the “blue book” value.

Example: You donate your car to the local high school for use by students studying car repair. Your credit union representative told you that the “blue book” value of the car is $1,600. However, your car needs extensive repairs, and after some checking, you find that you could only sell your car for $750. Your charitable contribution deduction may not exceed $750, the fair market value of the car.

This example is kind of odd…I mean how are you actually suppost to find out this number?

For information on determining the value of your car, see Publication 561, Determining the Value of Donated
Property. If you used your car in a trade or business, see the rules for contributions of capital gain property in Publication 526.

Written by in: -2008 Tax Laws |


0

Selecting a Charity for a 2008 Car Donation Tax Deduction

2008 Tax Deduction for a Car Donation Overview

If a tax deduction is an important consideration for you when donating a car a charity, you should check out the charity; check the value of your car; and see what your responsibilities are as a donor.

Through this Publication 4303, the Internal Revenue Service (IRS) and state charity officials provide general guidelines for individuals who donate their cars.

A companion brochure, Publication 4302, A Charity’s Guide to Car Donations, provides guidelines for charities that receive donated cars.
Note: This publication is not intended as a guide for corporate donors.

Selecting a Charity

If you are eligible to deduct charitable contributions for federal income tax purposes (see Qualifying for a Tax Deduction later) and you want to claim a deduction for donating your car to charity, then you should make certain that the charity is a qualified organization. Otherwise, your donation will not be tax deductible. The most common types of qualified organizations are section 501(c)(3) organizations, such as charitable, educational, or religious organizations.

This publication refers to section 501(c)(3) organizations generally as “charities.” To verify that an organization is a charity qualified to receive tax-deductible contributions, see IRS Publication 78, Cumulative List of Organizations, an annual list of most charities. Publication 78 is available
online at www.irs.gov/eo (under the Search for Charities 2 3 topic) and at many public libraries. You may also verify
an organization’s status by calling the IRS Customer Account Services division for Tax Exempt and Government Entities at (877) 829-5500 (toll-free).

Be sure to have the charity’s correct name. It is also helpful to know the charity’s address. Not all qualified organizations are listed in Publication 78. For example, churches, synagogues, temples, and mosques are not required to apply to the IRS for recognition of
exemption in order to be qualified organizations and are frequently not listed. If you have questions, call Customer Account Services at the above number.

Written by in: -2008 Tax Laws |

(c) 2024 Car Charity Donation