There has been some substantial changes in the IRS requirements for those who make car donations to claim the Fair Market Value of the vehicle. Just to recap these changes:
As of January 1st, 2005 those who make a charitable vehicle donation which is subsequently sold by the charity can claim what the charity receives when selling the donated vehicle. If the sale value of the vehicle is more than $500 then the car donation charity must provide a sales receipt to the donor for their tax deduction.
However, there are some exceptions to this rule which make it possible for you to claim the Fair Market Value of your car donation:
1. If the charity does not sell the car but keeps it for use in their charitable purpose. In other words, if the charity receives a donated truck, van or car and this vehicle is retained by the charity and used for their programs or services, then the donor can claim the Fair Market Value of the vehicle.
2. If the charity makes substantial repairs to the vehicle before selling it -- again, in this case the donor would be able to claim the Fair Market Value.
3. If the car is sold at a discounted price to a low income family or individual. Your vehicle may qualify for a full fair market value tax deduction, especially if it is in sound mechanical condition, or if the repairs that are required to bring the vehicle to running condition do not exceed the value of the car.
If you have any questions about what you can claim for your car donation -- give us a call & ask. We\'d be happy to explain your options. 1 (877) 505-5775