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How Much Will My Tax Deduction?

Often one of the first questions a person has when deciding what to do with a car they no
longer want is “What will my tax deduction be if I donate it to charity?” When you donate
car to charity the amount you can claim on your itemized federal tax return depends on two
things; the fair market value of your car and what the charity does with the car.

he fair market value of your car is the amount you could sell it for on the day you
donate car and is based on the condition the your car. To determine the fair market value
or FMV of your car you can use any of the popular pricing guides to help, including the Ke
lly Blue Book, NADA Guide or Edmund’s Guide. If you are using the Kelly Blue Book or
Edmunds Guide, you should start with the private party values and then adjust those
values according to the mileage and condition of your car. Do not use the values
listed under Retail or Clean Retail to determine the FMV of your car.
These are the values for the car if it were purchased from a car dealer and in excellent
condition. It is important that you are reasonable in determining which values to use
based on the actual condition of your car. Here are some general guidelines you can use
to help determine the correct selection for the condition of your car.if my car donate

he second thing that determines the amount you can claim for your tax deduction when you
donate car is what the charity does with your car donation. If the charity sells your car
as-is, without making any significant improvements, your tax deduction depends on the amount they
sell it for. If it is sold for more than $500, the sale price is the amount you can deduct. In this case,
the charity is required to provide you with IRS Form 1098-c. If your car is sold for less than $500,
you can claim the FM V up to $500.

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