| When donating your car to your favorite charity, | | | | You should take into the many factors into |
| the Internal Revenue Service (IRS) wants you to | | | | consideration to establish the fair market value of |
| be aware of certain pitfalls. After December 31, | | | | the car. Many used car buying guides contain |
| 2004, taxpayers planning their charitable giving, | | | | step-by-step instructions so that readers can |
| donors should understand the way that the | | | | make adjustments to the value of a car for |
| American Jobs Creation Act of 2004 will alter the | | | | accessories, mileage and other indicators of its |
| rules for the contribution of used motor vehicles, | | | | general condition. Publications like Publication 526, |
| boats and planes. | | | | Charitable Deductions, and Publication 561 provided |
| When the claimed value of the donated motor | | | | such details. |
| vehicle exceeds $500 and the item is sold by the | | | | Taxpayers cannot take a deduction for car |
| charitable organization, the taxpayer is limited to | | | | donations if they do not itemize deductions on |
| the gross proceeds from the sale. Under the rules | | | | their personal tax return. The decision to itemize |
| in effect for 2004, taxpayers will be able to | | | | is determined by whether their total itemized |
| deduct the fair market value of the contributed | | | | deductions are greater than the standard |
| property. | | | | deduction. |
| Here is what IRS officials recommend to people | | | | Taxpayers must document the automobile |
| donating their cars: | | | | donation and its fair market value. IRS Publication |
| Check the qualification of the Charity. Taxpayers | | | | 526 details requirements for the types of receipts |
| should make sure that they contribute their car to | | | | taxpayers must obtain and the forms they must |
| an eligible organization, else their donation will not | | | | file. |
| be tax deductible. They can use the IRS Website | | | | Some used car donation programs mistaken that |
| to check that an organization is qualified by | | | | donors can deduct the highest value listed in a |
| searching Publication 78. Publication 78 contains a | | | | used-car buyer's guide regardless of the donated |
| list of most organizations that are qualified to | | | | vehicle condition. The IRS only allows a deduction |
| receive deductible contributions. Publication 78 is | | | | for the fair market value of the car. Fair market |
| also available in many public libraries. If in doubt, | | | | value takes into account many factors, including |
| you can call IRS Tax Exempt/Government | | | | the vehicle's condition. |
| Entities Customer Service at 1-877-829-5500. | | | | |