Donating Car to Charity May Not Warm IRS Heart
NEW YORK (TheStreet) -- We have all heard the pitch from various charities offering to take an old vehicle off our hands. This seems like a win-win situation as the charity raises some funds and we get a tax deduction.
As most things in life, the devil is in the details. What do I mean by that? Donating a car to a charity is subject to special IRS rules.
That's right, if the FMV of the car you donated was $4,000 but the charity sells it for $2,500, the itemized deduction you can claim is $2,500. There are some exceptions to the above rules and the best place to learn them is IRS Publication 526 .
Next let's look at the tax reporting requirements.
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