What If The Car I Donate To Charity Is Worth More Than $500 or Less?

Maybe you are like most other people out there, busy for looking the answers when planning to donate a car to charity. Actually, what can you get when the value of your vehicle is more than $ 500 or less than that? Of course, you want to get the trusted clue based on applicable law. Okay, we will help you to provide information related to your question.

how much claim car donation worth more than 500 or less

There are 3 possibilities that apply regarding the sale value of your car when you donate, namely:

  • Selling value is less than $ 500
  • Selling value of more than $ 500
  • Selling value of more than $ 5000

In accordance with the applicable legal provisions, you must understand that if the price of the donated less than $ 500,  you able to claim the FMV of up to $ 500.

If you find that the value is more than $ 500 then you can claim a precise amount for that your car was sold for. You will also get the IRS Tax Form 1098-C and the selling value of your car within thirty days after the car sale is made.

And the last is when the selling value is more than $ 5000 then you need to fill the 8238 IRS Tax Form. So when filling out the form you also need to fill in Section B where the signature of the authorized charity official must be listed.

Referring to Publication 4303 from the IRS, for the sale price of a car that is donated higher than $ 500, the exact price will be reported in the receipt. Where you can get it via email. This is the amount of tax deduction for your car donation.

IRS Rules You Need to Look For

When you choose a charity then you must get information whether the non-profit tax-exempt organization falls under the IRS section 501 (c) (3). Because you will require it if you aim to get tax deductions. 

You will also receive the 1098-C IRS Tax Form by email after the vehicle you have donated has been auctioned or sold. On that form, you will find the amount allowed to be deducted for your tax.

Easy Understanding of FMV

You can say that the Fair Market Value is the selling price of the car that you expect when you sell it on the open market. FMV from a car or other vehicle is not the same as a blue book. This is because the value can fall due to wear or scratches on the car body or problems with the engine. These factors will reduce the selling value of the car. Whereas if you make significant improvements to the vehicle, the value can also increase. 

In general, the FMV value of cars is always based on the year of manufacture, maker, distance, model, and of course the condition. Consider using Kelley Blue Book because is one of the reliable and accurate reference sources when you want to know your car's FMV.

By donating the car, you have helped fund nonprofit organizations and you have helped many people who need it out there. You have given motivation in virtue and you should be entitled to get the maximum tax deduction.