Tax Tips Donating Your Vehicle to a Charity Read the Article Open Share Drawer Share this:Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Pinterest (Opens in new window)Click to print (Opens in new window) Written by TurboTaxLee Published Feb 12, 2007 - [Updated Oct 6, 2016] 3 min read Are you considering donating your vehicle to a charity in 2007? Have you already donated a vehicle in 2006? Then here’s a list of tax tips for you that deal with such donations. Tax Tip 1: Be sure that you are donating to a qualified charity. Check out the annual list of such charities at IRS – Search for Charities. Tax Tip 2: Be sure to understand the amount that you can deduct with your itemized deduction on Schedule A. If the Fair Market Value (FMV) of the vehicle is $500 or less, you can deduct that amount as your deduction. See Tip 4 for determining your FMV. If the value of the contribution is more than $500, here are the details. Generally the amount that you deduct for donating the vehicle depends on what the charity does with the vehicle. Typically charities sell the donated vehicle. If this happens to your vehicle, you’ll receive a written acknowledgment from the charity stating the amount that they received from the sale. That’s the amount that you can deduct on your Schedule A. There are a couple of exceptions to the above rule. If the charity “intends to make a significant intervening use” of the vehicle, you can deduct the fair market value of the car on the date of the donation. You can also deduction the FMV if the charity intends to give or sell the vehicle to a needy individual. Tax Tip 3: Be sure you receive the right acknowledgement from the charity. For any vehicle donation, you need to receive paperwork with the charity’s name, date of donation, description of the vehicle, and any goods/services that were provided in return for the donation. If the vehicle’s FMV is greater than $500, the paperwork needs to also have your name and the vehicle’s identification number (VIN). If your vehicle was sold, in addition to the information above, you need to receive a certification that it was sold in an arm’s length transaction, date it was sold, and gross proceeds received from the sale. If the charity intends to use the vehicle, you’ll also need statement certifying the intended use and duration of that use of the vehicle. Tax Tip 4: Be sure you determine the right FMV of your vehicle. If the FMV of your vehicle is $500 or less you’ll need to determine its value. It’s the same for a donated vehicle that the charity intends to use. You can figure out value with the typical vehicle pricing guides but beware that the deductible value can’t exceed the price listed for a private-party sale. It’s not based on the retailer resale value. For more information, see IRS’ Publication 561. Tax Tip 5: Be sure you know what to attach to your return. If your vehicle deduction is more than $500 and donated in 2006, you must attach the charity’s written acknowledgment. If your donation is in 2007, you’ll receive a Form 1098-C that will need to be attached to your 2007 tax return. See Form 1098-C. To find out more details on all of these tax tips, check out the IRS’ brochure Donor’s Guide to Vehicle Donations. Previous Post How to Handle Excess Contributions to Retirement Plans Next Post The Basics of a Traditional IRA Written by TurboTaxLee More from TurboTaxLee 0 responses to “Donating Your Vehicle to a Charity” The charity tells me I have to get the form from the IRS. The IRS won’t let you download it; you have to call and order one. My question is: OK, if we do all that, can we attach the form and file electronically. Or do we have to print out our forms (thru Turbo Tax) and snail mail the return? Reply Where within the TurboTax 2010 application do I enter the information for a car donation? I keep going to an item donation but the $700 donation amount is prohibited. Thanks in advance for any help. Reply You have to receive the 1098-C from the charity that you donated the car to…. only they can enter the information on that form. Reply I am trying to obtain an IRS Federal Form; Schedule 1098-c quick, fast and in a hurry. Help. Reply Leave a ReplyCancel reply Browse Related Articles Tax Tips How to Donate Your Time, Property, and Cash Tax Deductions and Credits Can I Deduct More Than One Car Donation on My Taxes? Life Podcast: Giving and Getting Back (at Tax Time) Tax Deductions and Credits Charitable Giving and Your Taxes Tax Deductions and Credits Holiday Donations and Tax Savings Tax Deductions and Credits Tax Tips if You Traveled for Charity Work This Summer Taxes 101 Charity Tax Deductions (What Counts as a Contribution?) Home Spring Cleaning and Charitable Giving Tips Tax Deductions and Credits 13 Tax-Deductible Donations That Aren’t Clothes Tax Tips 7 Wedding Expenses That Are Tax Deductible
The charity tells me I have to get the form from the IRS. The IRS won’t let you download it; you have to call and order one. My question is: OK, if we do all that, can we attach the form and file electronically. Or do we have to print out our forms (thru Turbo Tax) and snail mail the return? Reply
Where within the TurboTax 2010 application do I enter the information for a car donation? I keep going to an item donation but the $700 donation amount is prohibited. Thanks in advance for any help. Reply
You have to receive the 1098-C from the charity that you donated the car to…. only they can enter the information on that form. Reply