Is My Car Donation Made in California Tax Deductible?

For tax purposes, Californians need documentation on donated cars worth over $500

Donating your used car can be a lucrative and rewarding opportunity, especially when it comes to filing your federal tax return. If you live in California and donate your car, the fair market value of the vehicle is tax deductible and you only need your car's title to get started.

Finding a Charity

According to the Internal Revenue Service, or the IRS, car donations are tax deductible in California as long as you donate to an IRS-recognized organization that is registered to do business in the state. The IRS publishes a list of these donation-approved, 501(c)(3) charitable organizations, but you should also verify the charity's state registration with the California State Attorney General's listing. For a link to both the IRS charity database and the California State Attorney General's listing of recognized charities, see Resources.

Establishing Fair Market Value

Before you donate your car in California, you need to estimate your car's fair market value, which must be documented in order to receive your deductible at tax time. Your deductible is equal to the fair market value of the car, but it cannot exceed 50 percent of your adjusted gross income for that tax year. For a link to the Kelley Blue Book used car value estimator and an IRS guide to determining fair market value with a blue book, see Resources.

Transferring Your Title

Once you have determined your car's fair market value, you will need to get your hands on your California title, which is required by the charity if you want a tax deduction. If you do not have a copy of your title, you can request a replacement copy from the California Department of Motor Vehicles, or DMV. To prevent any liability issues, the website Goodwill Car Donation recommends that California drivers should remove the license tag off their car prior to donation and personally fill out the charity's transfer title form, even if the charity offers to do the paperwork. For a link to the California DMV, see Resources.

Filing out the Forms

In order for your tax deductible to go into effect after you donate your California ride, you must fill out Schedule A on Form 1040. If your car was valued at $250 or more, you do not need to submit any further documentation to the IRS, but you must keep the charity donation receipt as proof of the transaction. For cars that were valued at over $500, you need to fill out and submit Form 8283, Section A to the IRS, along with a donation receipt from the charity. Cars that are worth more than $5,000 require Form 8283, Section B, the charity receipt and written documentation from a state-certified appraiser.

References

• Internal Revenue Service: A Donor's Guide to Car Donation
• Goodwill Car Donation: Car Donation California

Resources

• Kelley Blue Book
• Internal Revenue Service: Determining the Value of Donated Property
• Internal Revenue Service: Search for Charities, Online Verification of Publication 78
• California Department of Motor Vehicles
• California Office of the Attorney General: Charities