Tax Tips – Is It Tax Deductible? – Donate an Auto

Tax TipsLearn tax tips so you will be informed and can save money on taxes!

Question – What is the tax deduction when I donate my car?

Example – When you donate your old car to charity, what’s the write-off?

Answer – Kelly Blue Book Value or Price at which the donated car is sold by the charity?

 

The answer is PRICE AT WHICH THE DONATED CAR IS SOLD BY THE CHARITY.

In most cases, your deduction is limited to the price paid for the vehicle when it is sold by the charity to raise cash. But, there’s a notable exception:

If the charity uses the vehicle in its mission (to deliver meals to the needy, for example) or fixes it up and gives it (or sells it for less than market value) to a needy family, you are allowed to claim a deduction equal to the vehicle’s fair market value (check used car guidebooks or Web sites). That could produce a bigger write-off since the value a charity gets at auction is likely to be a lower wholesale or even fire-sale price.Donate a Car

 

 

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