Donate Car To Charity

If you're eligible to deduct charitable contributions for federal revenue tax functions (see Qualifying for a Tax Deduction, under) and you want to claim a deduction for donating your automobile to charity, then you should make sure that the charity is a certified organization.

Otherwise, your donation will not be tax deductible. The most common types of certified organizations are section 501(c)(3) organizations, uch as charitable, educational, or religiousorganizations. This publication refers to section 501(c)(3) organizations generally as “charities.”

To confirm that a organization is a charity qualified to receive tax-deductible contributions, use the “EO Select Check” tool on the IRS website

Figuring out the Quantity You Can Deduct

The following guidelines on deductibility apply to donations of qualified vehicles. A certified vehicle is any motor vehicle manufactured primarily to be used on public streets, roads, and highways; a boat; or an airplane. However, a Vehicle Donation held by you primarily on the market to clients, such as an inventory of an automobile supplier, will not be a qualified vehicle. When you donate a non-qualified automobile, see Publication 526 for the rules and limits that apply to property donations.

The amount you may deduct for a car contribution relies upon what the charity does with the vehicles as reported in the written acknowledgment you obtain from the charity. Charities sometimes sell the vehicles which might be donated to them. If the charity sells the vehicle, typically your deduction is limited to the gross proceeds from the sale. However, there are particular exceptions, described below.

Written Acknowledgment for Vehicle Contribution Deduction of More Than $500

What the written acknowledgment must contain depends upon what the charity does with the vehicle. However, all acknowledgments must include the following information:

• Your title and taxpayer identification number,
• The vehicle identification number,  
• The date of the contribution, and one of the following:
• An statement that no goods or services were offered by the charity in return for the donation, if that was the case,
• An outline and good religion estimate of the value of goods or services, if any, that the charity supplied in return for the donation, or, a statement that goods or services offered by the charity consisted totally of intangible religious benefits if that was the case.

Note: If the acknowledgment does not contain all required information, the deduction might not exceed $500.

Gross Proceeds Limit Applies - Usually, if the charity sells your vehicle, your deduction is limited to the gross proceeds the charity receives from its sale. In addition to the data indicated above, the contemporaneous written acknowledgment should comprise:

• A statement certifying that the car was offered in an arm’s size transaction between unrelated events,
• The date the automobile was bought,
• The gross proceeds received from the sale, and ,
• A statement that your deduction may not exceed the gross proceeds from the sale.

Exceptions to Gross Proceeds Limit - Usually, if one of the following applies, you could be
eligible to deduct your car’s fair market value on the date you donated it

• The acknowledgment contains a statement certifying that the charity intends to make a significant intervening use of the automobile, a detailed description of the intended use, the period of that use, and a certification that the vehicle will not be sold before completion of the use.
• The acknowledgment contains a statement certifying that the charity intends to make a material improvement to the automobile, a detailed description of the intended material improvement and a certification that the vehicle won't be sold before completion of the improvement.
• The acknowledgment contains a statement certifying that the charity intends to offer or sell the car to a needy individual at a worth significantly under fair market value and that the reward or sale is in direct furtherance of the charity’s charitable objective of relieving the poor and distressed or the underprivileged that’re in need of a means of transportation. This exception won't apply if the charity merely applies the proceeds from the sale of the car to a needy individual for any charitable purpose.
• A special rule applies if the acknowledgment indicates that the donated car sold for $500 or less. In this case, you may claim a deduction for the lesser of the vehicle’s fair market value on the date of the contribution, or $500, provided you get a written acknowledgment from the charity that complies with the requirements described under Written Acknowledgment for an Automobile Contribution Deduction of $500 or less.