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Selecting a Charity

If you are eligible to deduct charitable contributions for federal income tax purposes (see Qualifying for a Tax Deduction, below) and you want to claim a deduction for donating your vehicle 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, use the “EO Select Check” tool on the IRS website

Determining the Amount You Can Deduct

The following rules on deductible apply to donations of qualified vehicles. A qualified vehicle is any motor vehicle manufactured primarily for use on public streets, roads, and highways; a boat; or an airplane. However, a vehicle held by you primarily for sale to customers, such as inventory of a vehicle dealer, is not a qualified vehicle. If you donated a non-qualified vehicle, see Publication 526 for the rules and limits that apply to property donations.

The amount you may deduct for a Donate Car To Charity contribution depends upon what the charity does with the vehicle as reported in the written acknowledgment you receive from the charity. Charities typically sell the vehicles that are donated to them. If the charity sells the vehicle, generally your deduction is limited to the gross proceeds from the sale. However, there are certain exceptions, described below.

Written Acknowledgment for Vehicle Contribution Deduction of More Than $500

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

■ Your name and taxpayer identification number,

■ The vehicle identification number,

■ The date of the contribution, and one of the following:

● A statement that no goods or services were provided by the charity in return for the donation,

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 donation, or,

● A statement that goods or services provided by the charity consisted entirely of intangible religious benefits, if that was the case.

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

Gross Proceeds Limit Applies — Generally, if the charity sells your vehicle, your deduction is limited to the gross proceeds the charity receives from its sale. In addition to the information indicated above, the contemporaneous written acknowledgment must contain:

■ A statement certifying that the vehicle was sold in an arm’s length transaction between unrelated parties,

■ The date the vehicle was sold,

■ 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 — Generally, if one of the following applies, you may be eligible to deduct your vehicle’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 vehicle, a detailed description of the intended use, the duration 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 vehicle, a detailed description of the intended material improvement and a certification that the vehicle will not be sold before completion of the improvement.

■ The acknowledgment contains a statement certifying that the charity intends to give or sell the vehicle to a needy individual at a price significantly below fair market value and that the gift or sale is in direct furtherance of the charity’s charitable purpose of relieving the poor and distressed or the underprivileged who are in need of a means of transportation. This exception will not apply if the charity merely applies the proceeds from the sale of the vehicle to a needy individual for any charitable purpose.

■ A special rule applies if the acknowledgment indicates that the donated vehicle 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 a Vehicle Contribution Deduction of $500 or Less.

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Vehicle_Donation.PDF