Donating A Car - What IRS Want You To Know

When donating your car to your favorite charity, theEntities Customer Service at 1-877-829-5500.
Internal Revenue Service (IRS) wants you to beYou should take into the many factors into
aware of certain pitfalls. After December 31, 2004,consideration to establish the fair market value of the
taxpayers planning their charitable giving, donors shouldcar. Many used car buying guides contain step-by-step
understand the way that the American Jobs Creationinstructions so that readers can make adjustments to
Act of 2004 will alter the rules for the contribution ofthe value of a car for accessories, mileage and other
used motor vehicles, boats and planes.indicators of its general condition. Publications like
When the claimed value of the donated motor vehiclePublication 526, Charitable Deductions, and Publication
exceeds $500 and the item is sold by the charitable561 provided such details.
organization, the taxpayer is limited to the grossTaxpayers cannot take a deduction for car donations
proceeds from the sale.if they do not itemize deductions on their personal tax
Under the rules in effect for 2004, taxpayers will bereturn. The decision to itemize is determined by
able to deduct the fair market value of the contributedwhether their total itemized deductions are greater
property.than the standard deduction.
Here is what IRS officials recommend to peopleTaxpayers must document the automobile donation
donating their cars:and its fair market value. IRS Publication 526 details
Check the qualification of the Charity. Taxpayersrequirements for the types of receipts taxpayers must
should make sure that they contribute their car to anobtain and the forms they must file.
eligible organization, else their donation will not be taxSome used car donation programs mistaken that
deductible. They can use the IRS Website to checkdonors can deduct the highest value listed in a
that an organization is qualified by searching Publicationused-car buyer's guide regardless of the donated
78. Publication 78 contains a list of most organizationsvehicle condition. The IRS only allows a deduction for
that are qualified to receive deductible contributions.the fair market value of the car. Fair market value
Publication 78 is also available in many public libraries. Iftakes into account many factors, including the vehicle's
in doubt, you can call IRS Tax Exempt/Governmentcondition.