Is My Car Donation Made in Ohio Tax Deductible?
Donating an old vehicle to a charity in Ohio is an effective and inexpensive way to get rid of an unwanted car while helping a charity you support. Charities accept cars whether they are running or not, because even undrivable cars can be sold for the value of their parts. If you intend to deduct the donation on your federal taxes as a charitable contribution, there are a few tips to keep in mind.
Other People Are Reading
-
Charity Status
-
The Internal Revenue Service only allows individuals to deduct car donations to 501(c)3 approved organizations and religious organizations. Although churches and other places of worship are not required to register with the Internal Revenue Service, you will be able to check the status of all other charitable organizations on the IRS website. In the online version of Publication 78, you can search by the organization's name and location for details on its charitable status.
Appraisal Value
-
If your vehicle is valued at more than $5,000, you will need to have it professionally appraised by a certified appraiser. Once the appraisal report is complete, both yourself and an agent from the charitable organization will need to sign it. The form will then need to be sent to the IRS when you claim the deduction on your yearly tax return. If you do not include an appraisal report, you will not be able to obtain the full deduction amount. Individuals claiming a deduction in excess of $5,000 also must fill out and attach Section B of IRS Form 8283 to their tax return.
For cars valued at less than $5,000, the deduction value is based on the proceed value that the charitable organization obtained from the donation. For example, a donated vehicle that netted a $450 profit for an organization would equate to a $450 deduction for the contributor.
-
Determine Use
-
Whether the Ohio charity intends to sell the vehicle for profit or use it for their own transportation purposes will depend on whether you can deduct the gross proceeds or the fair market value of the car. If the charity intends to sell the car immediately with no improvements, you are only allowed to deduct the gross profits that the charity received from the sale. However, if the organization intends to increase the car's value prior to selling it, or it plans to either use the car for its own purposes or donate it to a needy individual, the donor may deduct the fair market value of the car.
Receipts
-
Make sure you obtain a receipt from the charitable organization when the donation is complete. This receipt should include the estimated donation value of the car, along with the donor's name and vehicle description. If the organization obtains more than $500 from the vehicle sale, it will need to send additional documentation to the donor to show the precise donation amount. This documentation will be necessary when filing your federal tax return.
-
References
Resources
- Photo Credit Car driver sitting in his new car image by George Dolgikh from Fotolia.com
