Car Donation Charity
Tax Receipt Information
Donation vs. Trade-ins
Buying a car can be exciting, however you still have to decide how to
get rid of the old one.
A dealer will usually offer you a trade-in allowance based
on what he thinks he can get for it. This trade in amount can be used
as part of your down payment on the new car - Tax savings resulting from a car donation may exceed what you would get from a trade-in.
Making
a car donation
When the fair
market value of the vehicle is determined, a tax receipt is made that
can reduce your total tax liability. What you save is determined by the
tax bracket you are in.
The tax receipt should include the following information
- The charity's name
- Its Federal Tax ID number
- The donor's name
- Date of donation
- The year, make and model of the donated vehicle
Itemize your deduction
If you have made a car donation to gain a tax deduction, you'll need to
itemize your deductions on your federal and state income tax returns.
Report your charitable contributions on Schedule A of Form 1040.
If your total deduction for your vehicle donation is more than $500, you must complete Section A of Form 8283, and attach it to your tax return.
- For your own records, you will need proof of your car donation.
- The best evidence is to transfer the title of the car to the charity and keep a copy of this document.
If your car is valued at more than $5,000, you'll need to get a qualified appraisal to substantiate your claim for tax purposes.
You must complete Schedule B of Form 8283 for each item or group of items for which you claim a deduction of more than $5,000. These guides help you to make a fair estimate on the value of a vehicle.