Over the past few years the IRS has cracked down on vehicle donations, but you should not let the reports of new IRS regulations stop you from making a charitable contribution. Earlier this week the Roni Deutch Tax Center - Tax Help Blog posted a great new article explaining how to donate a vehicle to charity without leading to IRS problems. You can find a section of the blog entry below, or click here for the full text.
Selecting an Organization
One of the most important steps in donating a vehicle is choosing a qualified charity. Although you might want to help a specific organization, in order to claim the charitable contribution deduction you will need to donate your vehicle to an organization that is qualified by the IRS. You can use IRS Publication 78 to find a qualified charity, or just ask the organization if they have proof of their tax-exempt status.
Fair Market Value
Before you donate the vehicle, you will need to determine the fair market value of your car for tax purposes. Be sure to document the condition of your vehicle, and get estimates from a handful of sources. Make sure you find substantial proof to support the value you assign to the car.