Through this Publication 4303, the Internal Revenue Service(IRS) and state charity officials provide general guidelines for individuals
who donate their cars.
Before you give your car
to a charitable organization :
• check out the charity
• see if you’ll get a tax benefit
• check the value of your car
• see what your responsibilities
are as a donor to a charity
Selecting a Charity
If you are eligible to deduct
charitable contributions for federal income tax purposes (see Qualifying for a Tax Deduction later)
and you want to claim a deduction for donating your car to charity, then you should
make certain that the charity is a qualified organization. Otherwise, your
donation will not be tax deductible. The most common types of qualified organizations are section
501(c)(3) organizations, such as charitable, educational, or religious
organizations. This publication refers to section 501(c)(3) organizations generally
as “charities.”
To verify that an organization is
a charity qualified to receive tax-deductible contributions, see IRS Publication
78, Cumulative List of Organizations, an annual list of most charities.
Publication 78 is available online at www.irs.gov/eo (under the Search for
Charitie topic) and at many public libraries.
You may also verify an
organization’s status by calling the IRS Customer A ccount Services division for
Tax Exempt and Government Entities at (877) 829-5500 (toll-free). Be sure to
have the charity’s correct name. It is also helpful to know the charity’s
address. Not all qualified organizations
are listed in Publication 78.
For example, churches,
synagogues, temples, and mosques are not required to apply to the IRS for
recognition of exemption in order to be qualified organizations and are frequently
not listed. If you have questions, call Customer Account Services at the above
number.
If you want to learn more about a
charity before donating your car, use the resources listed under Assistance Through
the Charity, Through State Officials, and Through the IRS at the end of this
publication.
Qualifying for a Tax Deduction
You can deduct contributions to
charity only if you itemize deductions on your Schedule A of Form 1040. You
must take into account certain limitations on charitable contribution deductions.
For example, your deduction cannot exceed 50% of your adjusted gross income.
Other limitations may apply. Publication 526, Charitable Contributions,
, provides detailed information on claiming deductions and the deduction
limits. It also describes the types of organizations that are qualified to receive tax-deductible
contributions. Publication 526 is available online at www.irs.gov or by calling
(800) 829-3676 (toll-free)
Determining the Value of Your Car
The maximum amount you can deduct on your income tax return
is the fair market value of your car. Fair market value is the price a willing
buyer would pay and a willing seller would accept for the car, when neither
party is compelled to buy or sell, and both parties have reasonable knowledge
of the relevant facts.
Some fundraisers have mistakenly
claimed that donors can, in all cases, deduct the full value of their cars as found
in a used car guide (such as “blue book” value). A used car guide may be a good
starting point to value your car, but you should exercise caution. The IRS will
only allow a deduction for the fair
market value of the car, which may be substantially less than the “blue book”
value.
For information on determining
the value of your car, see Publication 561, Determining the Value of Donated Property. .
If you used your car in a trade or business, see the rules for contributions of
capital gain property in Publication 526.
Record keeping and Filing Requirements
Depending on the amount you are claiming as a charita-ble
contribution deduction, you may need to get and keep certain records and file
an additional form to sub-stantiate your charitable contributions.
WRITTEN ACKNOWLEDGMENT FROM THE CHARITY
You must obtain a contemporaneous written acknowledg-ment
from the charity if the total deduction you are claiming for a donated car is
$250 or more. The acknowledgment must include the name of the charity, a
description (but not value) of your car, and one of the following :
■ a
statement that no goods or services were provided by the charity in return for
the contribution, if that was the case,
■ a
description and good faith estimate of the value of goods or services, if any,
that the charity provided in return for the contribution, or
■a
statement that goods or services that the charity provided in return for the
contribution consisted entirely of intangible religious benefits, if that was
the case.
You must get the written acknowledgment on or before the
earlier of the date you file your return for the year you make the contribution, or the due
date, including extensions, for filing the return. A charity can provide either
a paper copy of the acknowledgment to the donor, or a charity can provide the
acknowledgment electronically, such as via e-mail addressed to the donor.
Do not attach the acknowledgment to your income tax return;
instead, retain it with your records to substantiate your contribution.