[Anonymous]

Hello Everyone,

I am thinking about donating my used car.

Is anyone familiar with how to claim this deduction?

I know it’s a schedule A line 17 item.

Can I use the kbb value as the fair value of the car for tax purposes?

I already itemize as I have a house.

Is their a limit on the amount I can deduct?

Any insights on this matter would be appreciated

[Missy]

Not likely to be able to deduct the FMV…………but possible. This articlee should help

https://www.edmunds.com/sell-car/does-charity-car-donation-still-make-sense-under-tougher-irs-rules.html

Old timer,  A71'er since 2010.

Finance manager/HR manager

 

 

Licensed Massachusetts Non Reporting CPA since 2012
Finance/Admin/HR Manager

[mrssnikal]

If you donate to Goodwill, they should send you a tax receipt after they sell it at auction.

AUD - 75
BEC - 77
FAR - 76
REG - 80

DONE!

BEC - 77
REG - July 2016
FAR - Oct 2016
AUD - Nov 2016

[Anonymous]

Thanks guys…if I usually get refunds…does it make sense to donate or would it be more beneficial to sell to a private party?

If I'm not mistaken, the donation would decrease amount of tax due.

[CPAcandidate3]

@cpa1sttry

Yes it would decrease your tax liability. That fact that you usually get refunds is irrelevant. All that says is you're having too much withheld from your paychecks. If you're looking for what's going to be most financially beneficial to you then you should sell it. From a pure financial standpoint it's almost never going to be more beneficial for you to donate it.

AUD - 83
BEC - 82
FAR - 86
REG - 82

Rogers + NINJA MCQ

[Anonymous]

The amount of donations reduces your taxable income (if you itemize, which in your case you do). That means you save the amount of tax that you would have paid on that much of your income, not that your taxes are reduced by the amount of the donation. Let's say you're in the 25% tax bracket and you donate something worth $1,000; you'll save $250 on your taxes. Clearly, the $1000 you could sell it to someone else for is more than the $250 you save on your taxes. So…if you're going to donate it, do it out of the goodness of your heart or for the “feel goods”, not for the tax break. (As others have mentioned, there's rules that complicate the donation, but just saying *if* you could claim $1,000, and also could sell it for $1,000, you'll still come out ahead selling it.)

[KaliKingz]

Agree with what Lilla said.

Also, consider that you may not be able to take advantage of the deduction, based on a number of things…. it's too early in the year to consider the tax implications of the potential transactions.
What I recently told a client: if the charity means something to you, then donate it for the karma, it you care about your bottom dollar, sell it as you will be better off.

AUD - 81
BEC - 81
FAR - 86
REG - 90

Even when winning is illogical, losing still far form optional.
-T.I.

[Anonymous]

PER IRS
Cars, Boats, and Airplanes
The following rules apply to any donation of a qualified vehicle.

A qualified vehicle is:

A car or any motor vehicle manufactured mainly for use on public streets, roads, and highways,

A boat, or

An airplane.

Deduction more than $500.
If you donate a qualified vehicle with a claimed fair market value of more than $500, you can deduct the smaller of:

The gross proceeds from the sale of the vehicle by the organization, or

The vehicle's fair market value on the date of the contribution. If the vehicle's fair market value was more than your cost or other basis, you may have to reduce the fair market value to figure the deductible amount, as described under Giving Property That Has Increased in Value , later.

[Anonymous]

You guys are the best. Got the answer I was looking. Thanks!

[Author]

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