Posted on November 16, 2005 at 16:49:38:
There was a time not so long ago, when charities advertised; asking for donations of automobiles and promising generous tax deductions. Too many people took advantage of this proposition, so Congress came up with stricter rules.
If the owner claims the vehicle is worth more than $500, and the charity sells it, the deduction is limited to the sales proceeds. But if the charity does not sell it, instead making significant use of the car or improving the car to increase its value, or if the charity donates the car or sells it below market value to a needy individual, following its own charitable purposes, then the donor may deduct the full private-sale market price.
The charity must acknowledge the gift within 30 days of the sale (and note the sale price) or within 30 days of the donation if the charity keeps the car. No deduction will be allowed unless the donor receives the acknowledgement.