Is My Car Donation Made in Oregon Tax Deductible?

Nonprofit status

To qualify for the deduction, the organization you donate your vehicle to must be a recognized nonprofit charity with 501(3)c status. Such organizations include churches and other religious organizations, tax-exempt educational organizations, tax exempt hospitals and other medical organizations and other publicly supported organizations. You can confirm an organization's nonprofit status by completing a search on the IRS website.

The IRS permits individuals to deduct up to $500 for a vehicle donation in the United States. If you can provide evidence that the contribution was in excess of $500, you can deduct the full amount. Documentation from the charitable organization will be necessary, however.

The general limits set by the federal government on charitable tax deductions is high, so unless you are unemployed or have a very modest income, you shouldn't have to worry about exceeding the allowed deduction for your car donation. This percentage is set at 50 percent of your adjusted gross income.

Most car donations will be eligible for a deduction based on the gross proceeds of the car once the charity sells it for profit. If, however, the charity intends to use the vehicle for its own purposes or to donate the vehicle to a needy individual who needs transportation, you may deduct the fair market value of the car. To take a fair market value deduction from the vehicle donation, the charity must submit documentation detailing the intended use of the vehicle. If the charity intends to make improvements to the vehicle to increase its selling price, the IRS will also allow a fair market deduction.

To deduct your car donation in Oregon, it is important to collect a receipt from the charity upon donating your vehicle. This receipt serves as proof that you donated your vehicle to a nonprofit organization and will be necessary when filing your yearly taxes. Make sure to keep the receipt in a safe place until tax time. The receipt should state a good faith estimate of the donation, the name of the charity and a description of the donated vehicle.