The policies regarding vehicle donations are not as straightforward as those for other types of charitable contributions. The amount of tax relief you can receive depends not only on the claimed value of your donation, but also on how the charity will use the vehicle. That's why you may not even be aware of your full tax deduction amount at the time that you make your donation.



Since 2005, changes have been made to the statutes for tax deductions applied to vehicles donated to charitable trusts. If the declared value of the donated vehicle exceeds $500, and the vehicle is placed for sale by the charitable trust, the taxpayer is limited to claiming the gross profits from the transaction.

If you would like to benefit from this type of charitable donation, you'll need to keep the following points in mind:

Itemize Your Deductions

You must itemize your deductions in order to take full advantage of tax relief available to you. If you are claiming standard education, you will not benefit from this clause.

Claiming Fair Market Value

When filing your tax return, be sure to deduct the fair market value of the vehicle. This amount will take into consideration the condition of the donated vehicle. Claiming the full value of the car is not acceptable.

Estimate the Fair Market Value

When determining the value of your car, there are various factors to consider. You can use an up-to-date used car guide for fairly precise instructions to evaluate your vehicle's value. Some adjustments may be needed to reflect the accessories, mileage and other indicators of the general condition of the vehicle.

Charitable Organization Eligibility

The charitable trust must qualify with the tax department in order for you to receive a tax benefit. A good place to find a complete list of recognized charities on with Publication 78, available online and in public libraries.

File the Charitable Contribution Deduction

It's important to keep good records when claiming a tax deduction for your vehicle donation. Store all of your receipts and forms, and keep a copy of its fair market value in a secure place.

Taxpayers in the United States who have donated a vehicle to charity can contact the IRS at 1-800-829-1040 to find out if the contribution is tax deductible. If you are afraid that someone has taken your contribution for deceitful purposes, you can speak with an appropriate state charity official at the state Attorney General's office.

Donating a spare vehicle is a very generous way to benefit your favorite registered charity. The organization will thank you, and the taxman will, too.