Car Donations

A question from a recent boot camp had to do with vehicle donations:

"When providing the donor with a thank you letter for a donated car, what amount do we list?"

From the IRS website:

"If the claimed value of the donated motor vehicle, boat or plane exceeds $500 and the item is sold by the charitable organization, the taxpayer is limited to the gross proceeds from the sale.

Under the new [2004] rules, the charitable organization must provide an acknowledgment to the donor within 30 days of the sale stating the amount of gross proceeds.

Alternatively, if the charity significantly uses or materially improves the vehicles, the charity must certify this intended use and duration and provide an acknowledgment to the donor within 30 days of the contribution. If the charity significantly uses or materially improves the vehicle, generally, the donor may deduct the vehicle’s market value."

Also check below in the IRS Guides section for Publication 526, it tells all about vehicle donations. It states that if the claimed value of the donated vehicle is more than $500.00 you can deduct what the charity sells it for OR the fair market value, which ever is LOWER.