IRS Publication 4303
A donor's guide to vehicle donation
The following are excerpts from IRS Publication 4303.
Determining the Amount You Can Deduct
Charities typically sell the vehicles that are donated to them. If the charity sells the vehicle, generally your deduction is limited to the gross proceeds from the sale.
State Law Rules on Liability – Vehicle Title
Generally, state charity officials recommend that the donor take responsibility for transfer of title to ensure termination of liability for the vehicle. In most states, this involves filing a form with the state motor vehicle department which states that the vehicle has been donated. Before donating the vehicle, you should remove the license plates, unless state law requires otherwise. This may help you avoid any liability problems after the vehicle is transferred.
FORM 8283, NONCASH CHARITABLE CONTRIBUTIONS
If the deduction you are claiming for a donated vehicle is greater than $500, but not more than $5,000, you must complete Section A of Form 8283 and attach it to your Form 1040.
Recordkeeping and Filing Requirements
You must attach to your return the written acknowledgment received from the charity if you are deducting more than $500.
See the chart Recordkeeping and Filing Requirements that follows.
* The receipt must minimally contain:
■ your name and taxpayer identification number,
■ the vehicle identification number,
■ the date of the contribution, and one of the following:
■ a statement that no goods or services were provided by the charity in return for the donation, if that was the case,
■ a description and good faith estimate of the value of goods or services, if any, that the charity provided in return for the donation, or
■ a statement that goods or services provided by the charity consisted entirely of intangible religious benefits, if that was the case.Note: If the acknowledgment does not contain all required information, the deduction may not exceed $500.
Gross Proceeds Limit Applies – Generally, if the charity sells your vehicle, your deduction is limited to the gross proceeds the charity receives from its sale.
In addition to the information indicated above, the contemporaneous written acknowledgment must contain:
■ a statement certifying that the vehicle was sold in an arm’s length transaction between unrelated parties,
■ the date the vehicle was sold,
■ the gross proceeds received from the sale, and
■ a statement that your deduction may not exceed the gross proceeds from the sale.
