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.
The IRS only allows taxpayers to use the fair market value for a car donation tax deduction, when certain conditions are met.
The car donation cannot be worth more than $500 to receive a car donation tax deduction. Or, the car donation has to be used directly by the charity in its programs or services.
For example, if a charity uses a car donation for its meals-on-wheels program, the donor may be entitled to claim the car's fair market value as a tax deduction.
But the vehicle needs to be in proper condition for the donor to assign fair market value.
Be careful. Your used car's value may not be as high as the listing in area pricing guides. High mileage and the vehicle's condition may lower the value.
Check with the IRS to learn more on figuring your car donation's value at tax time.
Two publications may help: IRS Publication 526, "Charitable Deductions," and IRS Publication 561, "Determining the Value of Donated Property."
The guidelines make it easier for taxpayers to follow car donation tax law when giving to charities.
|Jennifer Mathes, Ph.D.|