Car Donations for Charity Guide

Car Donations for Charity
 
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Guide To Car Donations, Boats and Airplanes

SECTION 4. DEDUCTIONS OF $500 OR LESS

4.01 Contemporaneous written acknowledgment required to substantiate a qualified vehicle contribution of $250 but not more than $500

A contribution of a qualified vehicle with a claimed value of at least $250 (as determined in accordance with section 5 of this notice) must be substantiated by a contemporaneous written acknowledgment of the contribution by the donee organization. For a qualified vehicle with a claimed value of at least $250 but not more than $500, the acknowledgment must contain the following information as required by § 170(f)(8): the amount of cash and a description (but not value) of any property other than cash contributed; whether the donee organization provided any goods or services in consideration, in whole or in part, for the cash or property contributed; and a description and good faith estimate of the value of any goods or services provided by the donee organization in consideration for the contribution, or, if such goods or services consist solely of intangible religious benefits, a statement to that effect. To meet the contemporaneous requirement of § 170(f)(8)(C), the acknowledgment must be obtained by the donor on or before the earlier of the date on which the donor files a return for the taxable year in which the contribution was made, or the due date (including extensions) of that return.

4.02 Sale of qualified vehicle yields gross proceeds of $500 or less

If a donor contributes a qualified vehicle that is subsequently sold, in a sale not described in section 3.02(3) of this notice, without any significant intervening use or material improvement by the donee organization, and the sale yields gross proceeds of $500 or less, the donor may be allowed a deduction equal to the lesser of the fair market value of the qualified vehicle on the date of the contribution or $500, subject to the terms and limitations of § 170. Under these circumstances, the donor must substantiate the fair market value (see section 5 of this notice), and, if the fair market value is $250 or more, must substantiate the contribution with an acknowledgment that meets the requirements of § 170(f)(8).

Example 4. D, an individual who itemizes tax deductions, contributes a qualified vehicle to O, an organization that is described in § 170(c). The qualified vehicle is sold without any significant intervening use or material improvement by O, and gross proceeds of $400 are received. In accordance with section 5 of this notice, D determined that the fair market value of the qualified vehicle at the time of the contribution was $800. Provided that D timely obtains a written acknowledgment that meets the requirements of § 170(f)(8) (see section 4.01 of this notice), and subject to the terms and limitations of § 170, D may be allowed a deduction not to exceed $500.

Example 5. The facts are the same as in Example 4, except that in accordance with section 5 of this notice D determined that the fair market value of the qualified vehicle at the time of the contribution was $450. Provided that D timely obtains a written acknowledgment that meets the requirements of § 170(f)(8) (see section 4.01 of this notice), and subject to the terms and limitations of § 170, D may be allowed a deduction not to exceed $450.