Tax Deductions for Car Donations

Car Donation and Tax Deductions

Car Donation Resources : Car Donation and Tax Deduction

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Car Donations and Tax Deductions
The following information is intended to aide you in answering all your questions about "car donation" and "tax deduction".

What are the tax benefits in donating my car?
Most charitable organizations are classified 501(c)(3) charity organization. You will receive a tax benefit when you donate a car to one of these organizations. Check with your tax advisor or accountant to determine the amount of your benefit.

For donating a car the IRS allows you to claim a tax deduction of:

the value of your car up to $500, or
the amount your car is sold for - if it is more than $500

2005 IRS Tax Changes: Important Car Donation Tax Changes for for 2005
If you donate your car to a qualified organization after December, 31, 2004, your deduction is limited to the gross proceeds from its sale by the organization. This rule applies if the claimed value of donated vehicle is more than $500. However, if the organization makes significant intervening use of or materially improves the car, you may be able to deduct its fair market value.

Featured Car Donation for Charities

Other Considerations and Recommendations

Check to ensure the organization is classified non-profit organization
To take advantage of the tax deduction for a car donation, you must itemize your tax deductions on your tax returns
Deduct only the car's fair market value
Keep all documentation from the donation transaction

IMPORTANT TAX INFORMATION! Individual tax situations vary, so always check with a tax professional to confirm that you would receive a tax deduction in your specific case.