About Donated Car Tax Deductions
Car donations are a popular way for many people to give to charities. National organizations that accept car and other vehicle donations include the National Kidney Foundation and the Salvation Army. Many smaller charities accept car donations through vehicle donation services that handle the pick up and sale of donated vehicles on their behalf. Donated car tax deductions may be substantial, but you must itemize your taxes and follow IRS rules in order to have the deduction allowed.
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Qualified Charities
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The organization you donate to must be a qualified charity. Qualified organizations include those listed in IRS Publication 78 (see Resources below) plus churches and some government entities.
Features
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You are allowed to donate only the actual sale price of the car. The charity must send you Form 1098-C within 30 days of being sold documenting the sale price.
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Size
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If the car is sold for less than $500 you may use fair market value up to $499 if it is greater than the sale price.
Exceptions
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In the event the charity makes substantial repairs to a vehicle or retains it for their use, you may take fair market value for your donated car tax deduction.
Filing Rules
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If the sale price is $500 or more you must file Form 8083 with your tax return. You may have to have the vehicle appraised if the value is over $5000.
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