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How to Donate a Car for a Tax Return

1.

Check the IRS database of qualified charitable organizations to make sure that the group you are donating your car to is qualified (see resources). If the group is not qualified, you cannot claim a tax deduction for donating your vehicle to that group.

2.

Ask the charity how it will use your car to determine how your deduction will be valued. If the charity will use the car, you can deduct the fair market value. If the charity will sell the car to raise money, you are limited to deducting the amount that the car sells for.

3.

Get a receipt from the charity that documents your donation and specifies the name and location of the charity, the date you donated the car, your identifying information, and whether you received anything in return for your donation. If the charity keeps the car for its own use, the receipt must specify what the car will be used for and how long it will be used. If the car is sold, the receipt must state the date of sale and how much the car was sold for.

4.

Complete form 8283 part A if your donation deduction for the car does not exceed $5,000. If your car deduction exceeds $5,000, you must complete section B and have the car valued by a professional appraiser.

5.

Report the amount of the deduction as a noncash donation on Schedule A, the list of itemized deductions. This amount will be used to reduce your taxable income.



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