Car Donation And The Irs

Written by Rylee Newton
Bookmark and Share

As many of you already know, the last thing you want to do is mess with the IRS. So, if you're donating a car, you want to make sure it's on the up and up. One way to ensure that you're meeting the new standards for assessing the value of your vehicle is to review official publications printed by the IRS.

In the last couple of years, the rules for writing off vehicle donations have changed. The Bush Administration created a new law that attempts to cut back on exaggerated or inflated fair market value assessments. As of 2005, people who donate their cars to charity are required to write them off for the price the charity sold them for.

Playing by the Rules

If you plan on writing off your donation, you need fill out a Schedule A of form 1040. If the value of your contribution is less than the standard IRS deduction, you might want to consider donating your goods to an organization that offers other incentives for contributions. Some organizations offer resort vacations and cruises in exchange for valuable donations. However, your first priority should be finding a charity that offers convenience to you as well as a worthy cause.

Before you donate a car or other vehicle to a charity, it's a good idea to consult with your personal financial advisor. If you don't have enough itemized deductions, you might want to consider selling the car or simply donating cash to the charity instead. While this may be a bigger hassle than donating the car directly to charity, it can save you money in the long run.


Bookmark and Share