Donating your vehicle to charity can lead to rewards for everyone involved. Not only can it give a deserving individual a fresh start, it can give your finances a jump-start with a tax deduction for car donation. Learn how to qualify for and claim car donations as charitable contribution deductions
The IRS has a few requirements if you want to claim your car donation as a tax deduction
Firstly, the charity in question must be eligible to receive tax-deductible contributions . Commonly qualifying organizations include section 501(c)(3) organizations. To ensure that the organization qualifies, reference Publication 78 or contact the IRS’ division for Tax Exempt and Government Entities.
You must itemize the deduction by reporting it on line 17 on Schedule A of Form 1040. Your deduction cannot exceed 50 percent of your adjusted gross income. For other charitable contribution deduction limitations, see Publication 526. If your deduction is more than $500, you’ll also complete Form 8283, including a written appraisal for deductions exceeding $5,000
Lastly, you should keep an adequate record of your donation through the receipt of a written acknowledgement from the charity. This should be attached to your tax return if you’re deducting more than $500. The details required of this acknowledgment depend on what the charity does with the car.
The amount that you can deduct for donations of qualifying motor vehicles depends on what the charity does with car. The charity documents this in the written acknowledgment you receive from the charity. Often times, charities sell donated cars, in which case the amount of your deduction is limited to the gross proceeds that the charity received from the sale of your car
However, in other scenarios, like when the charity gives or sells the donated car at a discount to a needy individual, you may deduct the fair market value of the car-that is, the price that a willing buyer would pay and a willing seller would accept for the car. While the value of cars as indicated in used car guides like Blue Book may provide a reference on the car’s value, remember that the fair market value is often considerably less than the Blue Book value due to damage or repairs your car may have incurred. But if the charity sells your car for $500 or less, you can deduct the lesser of either $500 or your car’s fair market value
See Publication 561 for more guidance on determining the value of your donated property.
The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.
A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!
Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.