| When donating your car to your favorite | | | | Entities Customer Service at 1-877-829-5500. |
| charity, the Internal Revenue Service (IRS) | | | | |
| wants you to be aware of certain pitfalls. | | | | You should take into the many factors into |
| After December 31, 2004, taxpayers planning | | | | consideration to establish the fair market |
| their charitable giving, donors should | | | | value of the car. Many used car buying guides |
| understand the way that the American Jobs | | | | contain step-by-step instructions so that |
| Creation Act of 2004 will alter the rules for | | | | readers can make adjustments to the value of |
| the contribution of used motor vehicles, | | | | a car for accessories, mileage and other |
| boats and planes. | | | | indicators of its general condition. |
| | | | Publications like Publication 526, Charitable |
| When the claimed value of the donated motor | | | | Deductions, and Publication 561 provided such |
| vehicle exceeds $500 and the item is sold by | | | | details. |
| the charitable organization, the taxpayer is | | | | |
| limited to the gross proceeds from the sale. | | | | Taxpayers cannot take a deduction for car |
| | | | donations if they do not itemize deductions |
| Under the rules in effect for 2004, taxpayers | | | | on their personal tax return. The decision to |
| will be able to deduct the fair market value | | | | itemize is determined by whether their total |
| of the contributed property. | | | | itemized deductions are greater than the |
| | | | standard deduction. |
| Here is what IRS officials recommend to | | | | |
| people donating their cars: | | | | Taxpayers must document the automobile |
| | | | donation and its fair market value. IRS |
| Check the qualification of the Charity. | | | | Publication 526 details requirements for the |
| Taxpayers should make sure that they | | | | types of receipts taxpayers must obtain and |
| contribute their car to an eligible | | | | the forms they must file. |
| organization, else their donation will not be | | | | |
| tax deductible. They can use the IRS Website | | | | Some used car donation programs mistaken that |
| to check that an organization is qualified by | | | | donors can deduct the highest value listed in |
| searching Publication 78. Publication 78 | | | | a used-car buyer's guide regardless of the |
| contains a list of most organizations that | | | | donated vehicle condition. The IRS only |
| are qualified to receive deductible | | | | allows a deduction for the fair market value |
| contributions. Publication 78 is also | | | | of the car. Fair market value takes into |
| available in many public libraries. If in | | | | account many factors, including the vehicle's |
| doubt, you can call IRS Tax Exempt/Government | | | | condition. |