Car Charity Donation - Limits on Tax Deductions
Car charity donation deduction or any other contribution can not exceed %50 of donor's adjusted gross income. Occasionally can not exceed %20 or %30 of donor's gross income. There is %100 exception too. If your total contributions include your car charity donation in last year is less than %20 of your gross income, limits don't apply and you can deduct all your car tax donation value (fair market value). Also your car deductible donation tax limit depends on public charity classification.
%50 Charity
%50 deduction applies only if you donate vehicle to %50 limit organization(donate auto charity). But if your total contributions include your car charity donation exceed %50 of your gross income, then the over carry over to next year tax return. We'll describe %50 limit organizations in donate car to charity article.
%30 Charity
You can deduct %30 of your charity car donation, if you give car to qualified charity other than %50 limit car donation charities center or car donation programs:
- Veteran car donation organizations
- Fraternal Societies
- Nonprofit Cemeteries
- Private non-operating Foundations
If the sale of property at fair market value would have resulted in long term capital gain(profit), it's capital gain property which includes capital assets held more than one year like Cars for personal use (car charity donation).
Special %30 for Capital Gain Property
%30 applies when you donate gift of capital gain property to %50 charities, however if you make car charity donation at fair market value instead of long term gain then %50 limit applies. This a charitable choice and following further charitable purposes.
%20 Charity
Applies to all contributions of capital gain property for use of charity. If donor make a auto charity donation for use of charity organization then only %20 limit of donor's car charity donation is tax deductible (other than all charitable car donations to %50 limit charities).
Conclusion
If you do want to maximize your car charity donation benefit on your tax deduction limit and your social work roles, never make a blind car donation. Before donating charity cars, get some information about automobile charities, their activities, what kind of limit organization they are and so on so fort.