Car Donations and Donor’s Responsibilities

 

Car donations responsibilities for donors are all about filing tax return form on time, record keeping to substantiate your vehicle donations and doing some research about charity or vehicle donation program which you donate car to.

Car donations are in non-cash contribution category which subdivides to 4 tax deduction segments:

1. Car donations deduction less than $250.
2. Car donations between $250 and $500.
3. Car donations over $500 but not more than $5000.
4. Car donations over $5000.

                1. If you claim deduction less than $250 for your car donation then you must get and keep a receipt from car donation charity which showing:

• The name and address of automobile donation charity.
• The date and location of charitable automobile donation.
• A detailed description of donations car.

2. For claiming deduction between $250 and $500(not more than $500), you must get a written acknowledgment from charity which contains 3 above listed items( under deduction less than $250) and also should meet following items:  

• Description of donated car (not necessarily the value).
• Whether the charity gave you any good or service in return of your car donation. In this case, description of good faith estimate value of tangible good or service. If the service is intangible (religious stuff), charities don't need to describe any estimate.
• You must get the written acknowledgment on or before the earlier of:

-The date you file your tax return for the year you make car donation.
-The due date for filing form1040 (tax return) including extensions.

 

3. Car donations deduction over $500 but not more than $5000 plus all above requirements, you need to file an additional form with IRS form 1040 which is Section A, Form 8283 (you have to attach it to tax return form).

 

4. For deduction over $5000 (for example you donate rv and claim for $10,000 deduction):

• File  section B, Form 8283 and attach it to tax return form.
• A written appraisal of your donated automobile from a qualified appraiser.

a- The appraisal must be written no more than 60 days before your car donations.
b- It must include signature of authorized official of auto charity.
c- You must get it before tax return due date includes extensions.

Title

Donor must make sure the title of donation car has been transfered otherwise he/she would be  in big trouble (paying  fine fee, raised car insurance fee). Sometimes car donation charities or fund-raisers forget to transfer the car title. We discuss this issue in  used car donations article.

Q: I made two car donations last year to same charity, how can I figure out my deduction?

A:  As long as your contributions are similar items (car), it doesn’t matter you made it to same or different charity, you can combine deductions. You have to get separate receipt or acknowledgment or appraisal from charity  (it should be the Fair Market Value of the Charity Car) but in tax return form, you can combine your similar items deductions. Certainly if you got any service or goods in return of your car donations from charity, it should be reduced from your deductions.