
PepsiLime
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They've changed the rules for donating a car (I'm surprised as to how many incorrect answers there are for this question). I've attached a link regarding the correct info, and charitable contributions in general.
Cars, Boats, and Airplanes
The following rules apply to any donation of a qualified vehicle.
A qualified vehicle is:
A car or any motor vehicle manufactured mainly for use on public streets, roads, and highways,
A boat, or
An airplane.
Deduction more than $500. If you donate a qualified vehicle to a qualified organization and you claim a deduction of more than $500, you can deduct the smaller of:
The gross proceeds from the sale of the vehicle by the organization, or
The vehicle's fair market value on the date of the contribution. If the vehicle's fair market value was more than your cost or other basis, you may have to reduce the fair market value to figure the deductible amount, as described under Giving Property That Has Increased in Value, later.
Form 1098-C. You must attach to your return the copy of the Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes, (or other statement containing the same information as Form 1098-C) you received from the organization. The Form 1098-C (or other statement) will show the gross proceeds from the sale of the vehicle.
If you do not attach Form 1098-C (or other statement), you cannot deduct your contribution. You must get Form 1098-C (or other statement) within 30 days of the sale of the vehicle. But if exception 1 or 2 (described next) applies, you must get Form 1098-C (or other statement) within 30 days of your donation.
Exceptions. There are two exceptions to the rules just described for deductions of more than $500.
Exception 1—vehicle used or improved by organization. If the qualified organization makes a significant intervening use of or material improvement to the vehicle before transferring it, and you claim a deduction of more than $500, you generally can deduct the vehicle's fair market value at the time of the contribution. But if the vehicle's fair market value was more than your cost or other basis, you may have to reduce the fair market value to get the deductible amount, as described under Giving Property That Has Increased in Value, later. The Form 1098-C (or other statement) will show whether this exception applies.
Exception 2—vehicle given or sold to needy individual. If the qualified organization will give the vehicle, or sell it for a price well below fair market value, to a needy individual to further the organization's charitable purpose, and you claim a deduction of more than $500, you generally can deduct the vehicle's fair market value at the time of the contribution. But if the vehicle's fair market value was more than your cost or other basis, you may have to reduce the fair market value to get the deductible amount, as described under Giving Property That Has Increased in Value, later. The Form 1098-C (or other statement) will show whether this exception applies.
This exception does not apply if the organization sells the vehicle at auction. In that case, you cannot deduct the vehicle's fair market value.
Example.
Anita donates a used car to a qualified organization. She bought it 3 years ago for $9,000. A used car guide shows the fair market value for this type of car is $6,000. However, Anita gets a Form 1098-C from the organization showing the car was sold for $2,900. Neither exception 1 nor exception 2 applies. If Anita itemizes her deductions, she can deduct $2,900 for her donation. She must attach Form 1098-C and Form 8283 to her return.
Deduction $500 or less. If the qualified organization sells the vehicle for $500 or less and exceptions 1 and 2 do not apply, you can deduct the smaller of:
$500, or
The vehicle's fair market value on the date of the contribution. But if the vehicle's fair market value was more than your cost or other basis, you may have to reduce the fair market value to get the deductible amount, as described under Giving Property That Has Increased in Value later.
If the vehicle's fair market value is at least $250 but not more than $500, you must have a written statement from the qualified organization acknowledging your donation. The statement must contain the information and meet the tests for an acknowledgment described under Deductions of At Least $250 But Not More Than $500 under Records To Keep, later.
You would end up reporting your deductible contribution on Schedule A - Itemized Deductions under non-cash contributions. |

Judy1
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You won't get the whole value back, but you might get some of it.
In most cases, the Salvation Army will sell the donated car at auction. After it's sold, they'll give you a receipt for what they sold it for. This might very possibly be well below "market value". Your deduction on your taxes is whatever they sold it for.
If you itemize deductions, you would list the car donation as a charitable deduction. So if they sold the car for $2000 and you are in a 15% bracket, your taxes would be lower by as much as $300.
If you don't itemize, you get no tax benefit from the donation. |