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Recent changes in the tax laws
governing vehicle donations have taken any uncertainty and guesswork out of
valuing your donated vehicle for tax purposes. For all vehicles donated and
sold with a market value over $250, the allowable deduction is equal to the
gross proceeds from the sale of the vehicle. Period.
The
Vehicle Donation
Confirmation (or the IRS Form 1098-C for those vehicles over $500) we
provide back to you indicates the gross proceeds we actually received when
we sold the vehicle.
Valuing vehicles under $250
For all lower priced vehicles
(over $250 but less than $500), we will provide you with a
Vehicle Donation
Confirmation.
You may still use that to establish your value.
Should you desire to establish
your own estimate of value for vehicles worth less than $250, we have provided links at right to three national organizations
that can generate an independent estimate of your vehicle's market value. In
addition to one or more of these estimates, you may also want to call around
to dealers of used vehicles to obtain other estimates for similar vehicles
in your area. You may want to look in the newspaper for listings of vehicles
similar to yours. Lastly, it's probably a good idea to take photos of both
the inside and outside of your vehicle to help substantiate its condition.
The following is an excerpt
from IRS Publication 561 entitled "Determining the Value of Donated
Property" on assigning a value to a donated vehicles prior to January 1,
2005. It is likely good advice if you are attempting to estimate your own
value:
"If you donate a car, boat, or
an aircraft to a charitable organization, its fair market value must be
determined. Certain commercial firms and trade organizations publish monthly
or seasonal guides for different regions of the country, containing complete
dealer sale prices or dealer-average prices for recent model years. Prices
are reported for each make, model and year of used car, aircraft, truck,
recreational vehicle and boat. These guides also provide estimates for
adjusting for unusual equipment, unusual mileage, and physical condition.
The prices are not "official," and these publications are not considered an
appraisal of any specific donated property. But they do provide clues
for making an appraisal and suggest relative prices for comparison with
current sales and offering in your area. These publications are sometimes
available at a bank, credit union or finance company.
Example. You
donate your car to a local high school for use by students studying
automobile repair. Your credit union told you that the "blue book" value of
a car like yours is $450 in good condition. However, your car needs
some repairs. After checking with repair shops and used car dealers,
you find that the car should sell for $250. You may use $250 as the fair
market value of the car."
While we have provided the
above information, the information on this page is not intended to provide
definitive instruction or guidance on how to value your donated vehicle for
those with market value below $250. If
you feel you need assistance or have questions, we strongly suggest that you
consult with your financial or tax advisor.
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