Vehicle Donations to Charity

Qualified vehicle donations to charity

For purposes of deducting charitable contributions, special rules apply for determining the value of used motor vehicles, boats and airplanes.

How to claim tax deduction for vehicle donations to charity on tax return?

If you donate a qualified vehicle with a claimed value of more than $500, you cannot claim a deduction unless you attach to your tax return a copy of the written acknowledgment you received from the donee charitable organization. The donee charitable organization may use the form 1098-C as the acknowledgment. If the form 1098-C is received, it must be attached to the tax return.

Claiming the value of vehicle donation to charity of more than $500

For a donated vehicle with a claimed value of more than $500, you can deduct the smaller of:

• the vehicle' s fair market value (FMV) on the date of the charitable contribution or

• the gross proceeds received from the sale of the vehicle, unless an exception applies.

Form 1098-C (or other acknowledgment) will show the gross proceeds from the sale if no exception applies.

If the fair market value or FMV of the vehicle was more than your cost or other basis, you may have to reduce the fair market value to figure out the tax deductible amount.

Vehicle donations to charity exceptions

If any of the following exceptions apply, your tax deduction is not limited to the gross proceeds received from the sale. Instead, you generally can deduct the vehicle's fair market value on the date of the charitable contribution if the donee organization:

• makes a significant intervening use of the vehicle: before transferring it,

• makes a material improvement to the vehicle before transferring it, or

• gives or sells the vehicle to a needy individual for a price significantly below fair market value if the organization's charitable purpose is helping individuals who are in need of transportation