1) You must itemize your deductions in your tax return.

Your total deductions cannot be more than half of your adjusted gross income. Use Schedule A of tax Form 1040 for your deductions, including the information from when you donate a car.

If you want more details on claiming deductions and deduction limits, visit http://www.irs.gov/publications/index.html and download a pdf of publication 526, "Charitable Contributions".

2) The charity you donate the car to must be qualified to receive the donation.
Usually this means the charity has 501(c)(3) status. You can check the IRS list of 501(c)(3) organizations online at http://www.irs.gov/charities/article/0,,id=96136,00.html, which is the online version of Publication 78, "The Cumulative List of Organizations". This list of charities is eligible to receive donations, both in cash and non-cash form.

You can also check a charity's 501(c)(3) status by calling the IRS division for Tax Exempt and Government Entities at 877-829-5500 (a toll-free number). Its wise to check a charity's status before you donate a car, even if the charity says they're qualified.

You also have the right to request the charity's application for tax exemption, their determination letter, and their most recent annual returns (also known as Forms 990). The charity can not charge you for this information, but they are allowed to request a small fee for copying and mailing the documents to you.

3) The car you donate cannot have been owned by you primarily for sale - ie, car dealerships cannot donate a car and get a tax deduction.





Yes, you can donate more than just a car, or a van, or a truck. You can donate "any motor vehicle manufactured primarily for use on public streets, roads, and highways; a boat; or an airplane." (from IRS publication 4303).




There's been a huge change to the rules when anyone donates a car, and it could be an unpleasant surprise if you were going to donate your car just for the tax deduction. Before 2005, you could give your car to any car donation charity, then turn around and deduct the value of the car you donated for the fair market value of the car when you donated it. No more.

Now, if you donate your car to one of these auction charities, you'll be able to deduct no more than the sale price of the car at the charity's auction, or $500, whichever is less. Most donated cars sell for around $200-$500 at auction.

The only way to get an IRS deduction for the fair market value (ie, the real-world sale price) of your car as of the day you donated it is if

1) The charity gives you a statement that they will use the car themselves for a specific purpose (they have to spell out the purpose), or that they will be giving the car to a needy individual for that person's use. The charity can also sell the car to someone in need, but the sale price has to be well below market value. Or

2) The charity gives you a statement saying they intend to make significant improvements to the car, what those improvements are, and that they will not sell the car you donated to them until those improvements have been made.

The statement (or letter), also needs to include your name and taxpayer id, the vehicle identification number and the date of donation. The charity can also use Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes, in lieu of a letter.

The charity will give you an acknowledgement of your donation in the form of Form 8283, Noncash Charitable Contributions (excuse the pun). You should attach Form 8283 to your tax return.

You need to receive this acknowledgement within 30 days of your car donation.