Car Donation Tax Benefits
We offer the Highest Allowed Fair Market Value Tax Deduction!
Tax Benefits of Donating a Vehicle to Charity
Cars with Causes makes it extremely simple to donate any type of vehicle, anywhere in the United States. One of our top priorities is making sure that all vehicle donations fully comply with federal tax regulations. We have included quite a bit of information on this topic and do hope you will take the time to read it to better understand how you may benefit. (Please also read our extensive FAQ Page)
Is a vehicle donation tax deductible?
Yes, all donations made to Car with Causes are tax deductible. Please refer to IRS Publication 4303 for tax related questions.
How is the value of my tax deduction determined?
IRS guidelines stipulate that donors may claim fair market value for their vehicle donation, based on a sales price that the charity receives from the sale of the vehicle. If a vehicle is sold for more than $500, the maximum amount of your deduction will be the sales price of the vehicle which will be listed on your IRS Form 1098-C, and in some cases, the supplementing IRS form 8283
How does the IRS define Fair Market Value?
IRS defines “Fair market value (FMV) is the price that property would sell for on the open market. It is the price that would be agreed on between a willing buyer and a willing seller, with neither being required to act, and both having reasonable knowledge of the relevant facts”. This often changed from “blue book” value as markets are always changing and impacted by the current economy and geographical location.
How do I receive my tax donation paperwork?
Once your vehicle has sold, you will automatically be issued appropriate IRS tax forms. If it has been more than 60 days since your vehicle was picked up and you have still not received them, please call our office and one of our representatives will be happy to provide an update or resend the documents.
If I make a donation at the end of the year but don’t receive my tax form until the next year, what year do I claim my deduction?
Your tax paper work will be dated on the date the vehicle contribution takes place, not the date your paperwork is issued. This means that you will claim your deduction for the tax year that you made the contribution, regardless of when your paperwork arrives.
Where can I find additional IRS tax deduction requirements for a charitable car donation?
- IRS Publication 526, Charitable Contributions
- IRS Publication 561, Determining the Value of Donated Property
- IRS Publication 4303, A Donor’s Guide to Vehicle Donations
- IRS Form 8283, Noncash Charitable Contributions
- IRS Instructions for Form 8283, Noncash Charitable Contributions
If you have questions, we encourage you to reach out to your tax advisor on how making a contribution will affect your personal tax situation.
When will I receive a donation tax receipt?
You will receive a temporary donation receipt before or at the time of pickup. This initial receipt will include your contact information, details of what was donated (year, make, model, condition of the donated vehicle), and our contact information along with EIN. This will serve as your proof of donation while we are processing the vehicle for either sale or gifting.
Within 30-60 days after the vehicle has been picked up, you will then have the IRS Form 1098-C “Contributions of Motor Vehicles, Boats, and Airplanes” mailed to you at the address provided on the initial online form or donation receipt. This form will list the details of the vehicle, as well as the amount of gross proceeds received from your donation. If the vehicle does not sell for $500 or more, there will be no amount listed and instead Box 7 on the 1098-C will be checked.
What happens if my vehicle sells for $5,000 or more?
When a vehicle is sold for more than $5,000, we will also issue you an IRS form 8283 in addition to the 1098-C. This form will come to you with Section B pre-filled, and Part V original signature signed as the donee acknowledgement.
If my vehicle for sells for more than my annual income, how much of my deduction can I claim?
Often times with those who are donating their aircraft, yacht, or high end vehicles, the deduction amount will exceed their annual income. Cars with Causes is a funding program of Giving Center, which is a 50% organization. This means that you can claim a deduction of no more than 50% of your adjusted gross income per year.
You may be able to deduct the excess in each of the next 5 years until it is used up, but not beyond that time, as addressed on page 19 of IRS Publication 526. For questions on how a contribution will affect your specific tax situation, please consult with a qualified tax advisor.
What is the last day that I can donate my vehicle to count toward this years taxes?
Cars with Causes does everything possible to ensure you can make a year end car donation as quickly as possible. In order to qualify for this year, donations must be made by 12/31. In cases where we are not able to physically pick up the vehicle in time, we can honor year end donations by having all paperwork completed by 12/31 to secure your donation to Cars with Causes, and schedule pickup at a later date. *For a donation to qualify for a contribution, the vehicle must be picked up and sold in a timely fashion with all paperwork submitted and completed.
*For corporate fleet vehicle donations, 12/31 donation dates may not apply
I made a vehicle donation but have misplaced or did not receive my IRS 1098c. What do I do now?
Please reach out to our office and we are more than happy to reissue you the appropriate tax documentation.
Most of what was discussed above will already be common knowledge for professional accountants. We also have many more Vehicle Donation FAQs you can read to learn even more. Call us Toll Free at (888) 228-7320 if you have any questions about tax procedures or any questions for that matter. Our friendly and professional team is here to help!
Are you ready to donate?
We make a living by what we get, but we make a life by what we give..
Cars with Causes was started as a funding project for Giving Center (EIN# 46-1883892), an IRS-approved 501(c)3 nonprofit organization that operates nationwide. Giving Center was created to help bridge the gap between those in the community who have the means and wish to help, with those who are in dire need of a helping hand and a little grace. We have a team of professional transporters and in house volunteers with both the technical and legal experience to assist you in the donation of any type vehicle.