Little Rock, Fayetteville, Bentonville Indian Community - ArkansasIndian.com
| | |
 


 

Donating a Car To Charity as a Tax Write-Off - April 2021

Money
Contributed by : Mukesh Makker
Add To My Favorite
Share With Your Friends



If you donate a car to a qualified charitable organization and intend to claim a deduction, you should be aware of the special rules that apply to vehicle donations.

Charities typically sell donated vehicles. If the charitable organization sells the vehicle you donated it to, the deduction claimed by the donor (you) may not exceed the gross proceeds from the sale.

If the donated vehicle sells for less than $500, you can claim the fair market value of your vehicle up to $500 or the amount it is sold for if less than fair market value without the need to file any additional paperwork with the IRS. The donee organization should furnish you with Copy B of Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes, stating the donation amount.

The taxpayer can generally deduct the vehicle's Fair Market Value (FMV), if:


  • The charitable organization makes significant intervening use of the vehicle, such as using it to deliver meals on wheels.


  • The charitable organization donates or sells the vehicle to a needy individual at a significantly below-market price if the transfer furthers the charitable purpose of helping a poor person in need of a means of transportation.

  • The charitable organization makes a material improvement to the vehicle, i.e., major repairs that significantly increase its value and not mere painting or cleaning.


If the donated vehicle sells for more than $500 and your deduction is $500 or more, you must obtain written, contemporaneous (timely) acknowledgment of the donation from the charitable organization. You must also attach Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes, to your tax return.

The written acknowledgment generally must include your name and taxpayer identification number, the vehicle identification number, the date of the contribution, and one of the following:

  • A statement that the charity provided no goods or services in return for the donation, if that was the case,

  • A description and good faith estimate of the value of goods or services, if any, that the charity provided in return for the donation, or,

  • A statement that goods or services provided by the charity consisted entirely of intangible religious benefits, if that was the case.


If the written acknowledgment does not contain all of the required information, the deduction may not exceed $500.

For more information about donating a car to charity, please contact the office.


About Author
Mr. Maker is a certified Public Accountant and serving the South Asian community since 1993.

Website: https://taxprofessionalsnw.com/newsletter.php#10

 

Disclaimer: Please use this channel at your own discretion. These articles are contributed by our users. We are not responsible or liable for any problems related to the utilization of information of these articles.

 

View All Contributions

Post an Article
Notify Me of New Articles

Become A Featured Contributor
Add Your Blog | Add Recipe | Add Article

More Article by Mukesh Makker

Nikita Rawal gets a birthday surprise by her fans; watch her reaction
International Cricketing Legends to play for Friendship Cup UAE in Sharjah
IMPORTANT TAX CHANGES FOR INDIVIDUALS AND BUSINESSES - Jan 2020
View All Articles

Featured Contributors


Dilip Saraf

Praveen Nair

Vivek Wadhwa
Vivek Wadhwa

Shruti Sadolkar

Rima Arora

Christine Dunbar
Christine Dunbar

Darshan Goswami

Aayushi Manish

Vasudha Sharma
Vasudha Sharma

Latest Articles

San Jose Resident Travels to D.C. to Urge Congress to Ensure Childhood Cancer Research Remains a National Priority by Priscilla Cabral
Discover Proven Strategies for Healthy Living Today by Anya Willis
4 Healthy Ways to Help You Maintain Your Sobriety by Anya Willis
Akshay Kumar unveils New BTS Video for "Bade Miyan Chote Miyan by Staff
Akshay Kumar Unveils Soul-Stirring Music Video "Shambhu" Dedicated to Lord Shiva by Staff
View All Articles