Special Rules for Deductions Over $500

Read this tip to make your life smarter, better, faster and wiser. LifeTips is the place to go when you need to know about Car Donation Tax Deduction and other Car Donation topics.

What are the IRS rules for car donation deductions over $500?

Special Rules for Deductions Over $500

Car donation tax law changed in 2005 for taxpayers who claim a deduction greater than $500. If the vehicle is sold by the charity, the deduction claimed by the donor cannot exceed the gross proceeds from the sale. Taxpayers also need to supply Form 1098-C to the IRS, or a written acknowledgement by the charity that states the gross proceeds from the sale. The statement needs to be attached to the taxpayer's return. It must contain the Vehicle Identification Number, known as the VIN. The charity must also state in the acknowledgment that the transfer was between unrelated parties.

   

Comments

Nobody has commented on this tip yet. Be the first.



Name:


URL: (optional)


Comment:


Not finding the advice and tips you need on this Car Donation Tip Site? Request a Tip Now!


Guru Spotlight
Mary White