If the charity sells your vehicle for more than $500, you can claim the sale price as a tax deduction. On the other hand, if your vehicle sells for $399 but the fair market value is only $300, you can claim only $300. To illustrate, imagine the fair market value of your vehicle is $1,000. ![]() As of 2017, if your donated vehicle sells for less than $500, you can claim the fair market value of the vehicle up to $500. When you donate a vehicle, the amount of your deduction can vary based on the selling price of the vehicle. For example, donating a car to a school will qualify for a fair market value deduction when the car is used for training purposes and is substantially improved in the process. The advantage of donating a vehicle to a 501 (c) (3) organization is that you may use fair market value for your tax deduction, if the donation is used to support the charity's mission. The majority of them are operated in support of religious, educational, literary, and scientific purposes. Qualifying Charitable OrganizationsĪ 501(c) (3) organization is the most common non-profit organization. That $5,000 lowers your taxed income to $55,000. ![]() To put it simply, let's say you have $60,000 of taxable income and you make a donation of $5,000. Essentially, the value of the donation lowers your taxable income. The Internal Revenue Service allows you to claim a deduction on your tax return for charitable donations. Wondering how that works? Here's an overview of what you need to know. When you donate a vehicle to charity, you can receive a tax deduction on your income tax return.
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