Car Donation Tax Deduction for 2011, 2012

Make Sure the Organization is Qualified

As taxpayers we have to make sure the organization is eligible before we contribute our cars to them. If theyʼre not qualified, our car donation will not be tax deductible.

Publication 78 is a list that lets you know if the organization is eligible to receive the car donation. This list is available in most public libraries or you can call the IRS Tax Exempt Customer Service.

Churches, temples, mosques, synagogues and governments do not have to apply in order to be qualified to be on the list. Donations to institutions like this are always tax deductible.

Make Sure You Document the Contribution

If you are planning to claim a claim a car deduction tax deduction, you should document the donation and its fair market value. You will need a receipt from the organization. IRS Publication 526 has all of the details on the rules and regulations for the receipt and forms. There are a few differences depending on the value of the car and the total amount of charitable deductions you have.

Be Honest About the True Value

You have to take many factors into consideration to determine the value of the car. There are a lot of used vehicle guides on the market to help you find the true market value. You are only allowed to deduct the gross amount of the sale. If the charitable organization made any improvements to the car, they are supposed to let you know within 30 days what the gross profit was. Do not go by the highest value for the vehicle. Consider the mileage, age, any damage and base the value on all of those facts.

When in Doubt

If you have any questions about your car donation as a tax deduction, you can go to TurboTax Online to find answers.