How To Deduct Fair Market Value
These are the four IRS rules under which you can get the maximum deduction (the fair market value) of a donated car, [WE WILL COMPLETE THE PAPERWORK FOR YOU]:
1. When a charity auctions your car for $500 or less, you can claim either the fair market value or $500, whichever is less.
2. When the charity intends to make a “significant intervening use of the vehicle.” This means the charity will use the car in its work, such as delivering meals to needy people.
3. When the charity intends to make a “material improvement” to the vehicle, which is “anything that increases the car’s value and prolongs its life,” Midwood says. “It can’t be a minor repair or maintenance; it must be something like fixing the engine or systems that run the car,” she says.
4. When the charity gives or sells the vehicle to a needy individual at a price significantly below fair market value, and the gift or sale is part of the charity’s mission of helping the needy who need transportation.
How To Determine Fair Market Value
To recap, the IRS defines fair market value as the price a willing buyer would pay and a willing seller would accept for the vehicle, when neither party is compelled to buy or sell and both parties have reasonable knowledge of the relevant facts. Neither the buyer nor the seller can be an auto dealer. Both must be private parties.
Edmunds.com makes it easy to determine your vehicle’s fair market value. And, as Midwood says, your assessment has to be “an apples-to-apples comparison.”
IRS Publication 4303 explains this in more detail.
CREATE Audio Art Foundation, Inc., is an IRS recognized, non-stock/non-profit 501(c)(3) strictly charitable organization. We have free pick-up, and we will process your paperwork for you, for free. You will receive a Written Acknowledgment receipt for your records and to process your 1040 tax deduction.
To donate your vehicle call 904-345-0701 or simply fill out the form below with your vehicle details and we will contact you shortly to see if we are able to accept your donation.