Q&A: After donating a car to a charity, how much do you think I will get after I write it off?

Question by Q-Tee: After donating a car to a charity, how much do you think I will get after I write it off?
How much do you get for writting off a car to charity?

Helpful replies:

Answer by Al
i believe the laws were changed so that no matter what the car was you could only recieve a value of 500 dollars to clain on your taxes and the amount of the return would be very minimal

Answer by Phillipe
In 2005, the IRS changed the rule. From then on, if your car is valued at more than 0, the deduction is limited to the charity’s actual selling price. The donor must attach a statement of sale to the tax return in order to receive the deduction. (The charity is obligated to provide the statement within 30 days.) You are not entitled to know the deduction amount before donating your car.

if you’ve got a car with a market value of ,000 that you’re looking to unload, you have four options.

1. Donate it to a standard charity that has 501(c)(3) tax-exempt status with the IRS. The letter you receive will state the amount it was sold for — far less than the market value. Say it’s sold at auction for 0. There is a special rule that could apply if your car was sold for less than 0. If you get a written acknowledgement from the charity that meets the IRS requirements, you can claim a deduction of the fair market value or 0-whichever is less. We recommend you check out the IRS’ donor information guide for more details.

2. Trade it in on a new car — never a great deal. Dealers are never excited to get people’s old beater cars as trade-ins, although a late-model luxury or Japanese car might fetch a reasonable price. But dealers often use your trade-in to jiggle the terms of your new car purchase or lease, so you have to be pretty savvy not to get taken advantage of. (If you go this route, be sure to see Trading In Your Used Car first.) If you traded in that ,000 car, you’d be lucky to get 0.

3. Donate it to an organization such as Charity Cars, which uses the car as part of its stated cause. This allows you to deduct the car using Edmunds.com’s True Market ValueSM. Using the 33-percent tax bracket again, that means ,000 x 33% = 0 in your pocket.

4. Sell it privately for around its full market value of ,000. Though it’s generally the harder road, this is what we recommend. The advent of Internet sites such as Autotrader and eBay Motors can make it much easier, though it depends if your car is in demand.

A word of caution: When it comes to tax deductions, there’s more to it than your tax bracket. For example, you can’t take advantage of a car donation at all unless you itemize your taxes. Other factors include your income, need for deductions, and the car’s value. A certified accountant can help you decide if donating is in your best interest, or you can ask the IRS at (800) 829-1040.

http://www.edmunds.com/advice/selling/articles/48930/article.html