Tax Deductions Related to Donating a Vehicle to a Nonprofit

Donations of goods to nonprofits usually count toward the year in which the donation is made. For example, take a box of clothes to the Goodwill and you get to take the deduction in that year. However, the rules for deducting the fair market value of a vehicle are different.

The IRS code section changed at the end of 2004, but how often does one donate a car? The qualified charity has to sell the car first, and then you get to deduct the gross proceeds of the sale. Heart of the Valley will report this amount to you and handle the DMV paperwork. This means that in order to take a deduction in the current tax year, the donation of “old betsy” that’s taking up space in your garage or driveway needs to be done sooner rather than later, to give Heart of the Valley time to secure a buyer before the end of the year.

Heart of the Valley has an excellent track record of selling cars fairly quickly and actually has difficulty keeping any inventory of cars in stock at all, which is a good thing, for you, the donor. So give us a call soon at (408) 241-1571 and we will make it very easy for you to donate your vehicle and take the tax deduction in the current tax year.