If you’d like to donate your car to a charity you support there are a few rules to follow.
1. Keep the name of the organization
2. Date and location of the donation
3. Description of the donated property
4. Fair Market Value and how that is being determined
5. Cost or other basis of the property.
This is the same for all donations made to charities. For a car there are a few other considerations.
If the car is valued over $500, you MUST have a Form 1098-C from the charity to take the deduction and it MUST be attached to the tax return.
The value the charity will state for the car on the 1098-C will depend on what the charity does with the car.
If the charity sells the car, the amount the charity receives for the car will be on the form and that is the amount you can use as a charity deduction on Sch A.
If the charity gives the car to a needy person, you will be able to take the FMV of the car as a charity deduction on Sch A, even if the charity sold the car for less than FMV to the needy individual. The charity will mark box 5b on the 1098-C if this is the case.
If the charity decides to keep your car to use for its own purposes, you can generally deduct the FMV of the car as a charity deduction on Sch A. Box 5a on Form 1098-C will be marked.
Bottom line: Make sure you get a 1098-C !!!