Tax Benefits of Car Donation

When you donate through our program you are eligible for a tax deduction. However, to claim your deduction you need to itemize on your income tax return.

In 2005, the IRS changed the laws related to tax deductibility of car donations because of exaggerated deductions based on inflated book values. Under the new rules, the deductible amount of your vehicle donation is directly related to the selling price of your vehicle.

Donate a car and if it sells for less than $500 you can take a tax deduction equal to the 'fair market value' of your donation up to $500. Fair Market Value is explained as the "Blue Book" or "Guide Book" value of your vehicle. The charity is legally prohibited from providing fair market value to the donor but you can access that information easily. See our car donation to charity help links below for Kelley Blue Book, NADA Guides or Edmunds.

The receiving charity is required by IRS to send the donor a receipt or "contemporaneous written acknowledgement" within 30 days of the vehicle sale. This receipt must include the following:

1. The gross selling price of the vehicle (if sold for greater than $500)
2. Year, Make, Model and VIN Information
3. A statement that the vehicle was sold at arm's length between two unrelated parties
4. And a statement that no goods or services were received in return for your contribution.*

*Keep in mind, companies promising goods or services in return for your car donation are legally cutting into the amount that you can claim for a tax deduction.

If you have additional question about deductions and IRS Regulations the following links may be of assistance: