Car Donation Tax Deduction Amounts

Qualified Charities

The IRS will disallow a tax deduction for a donated vehicle if the recipient is not a qualified charity. In general, 501(c)3 nonprofits are qualified. IRS Publication 78-Qualified Charities lists qualified nonprofits. Many unlisted religious organizations also qualify. Publication 78 is available online at irs.gov. You may also call the IRS at 877-829-5500 for information.

Car donation tax deduction amounts are generally limited to the sale price the charity or its donation service gets when a vehicle is auctioned. The receiving organization must send you an acknowledgment of the donation that states the price the car was sold for within 30 days of the sale. This sale price is the amount you may use as a tax deduction.

There are two situations in which you may use a donated car's fair market value as your tax deduction amount. First, if the vehicle sells for less than $500, you may use the sale price or the fair market value (up to $499), whichever is more. Second, if the charity makes substantial improvements to the car or keeps it for use, you can use fair market value as your tax deduction amount. IRS guidelines for determining fair market value are described in Publication 561, available at irs.gov.

You must file an itemized tax return in order to take any tax deduction for a donated vehicle. In addition, you have to complete Form 8283-Noncash Charitable Donations. If your total charitable donations are less than $5,000, fill out section A only. If the value of donated property, including the car, is $5,000 or more, complete section B. Sign Form 8283 and attach it to your tax return.