Locate a real 501(c) (3) organization. If unsure if the organization qualifies, refer to Publication 78, Cumulative List of Organizations, or contact the IRS directly at 877-829-5500. If an organization is not on the list, your donation might be disallowed by the IRS.
Determine the value of the vehicle by using a vehicle cost guide, such as the Kelley Blue Book. In general, the amount that you can deduct for your vehicle is limited to the amount of the sale of the vehicle by the charity. However, you might be eligible to use an exemption. Generally, there are several exemptions that may allow you to claim the Kelley Blue Book price on your vehicle.
The first exemption is when the organization signs a statement that describes the vehicle will be used by them for a certain amount of time. Second, if the charity intends to make improvements to the vehicle, a similar statement must be signed. The third exemption is when the charity has a recipient in mind for the vehicle and intends to donate it or provide it at an amount much below the fair market value (such as a Kelly Blue Book price). The fourth exemption applies to a maximum contribution limit of $500 or the fair market value, whichever is less, regardless of the Kelley Blue Book price.
Using a vehicle cost guide, such as the Kelly Blue Book, may allow you to take the fair market value of the vehicle as your deductible amount, as long as the same make, model, year, and vehicle condition apply. Furthermore, the deduction may not exceed the fair market value of a vehicle if you were selling it to a private party. Kelley provides a 27-point quiz that gives credibility to the condition of your vehicle at the time of donation. Visit www.kbb.com and choose "What's My Blue Book Value" to complete the online form to provide a solid fair market value of your vehicle.
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