Can I Donate Grandma’s Car to a Non-Profit and Get an Income Tax Deduction?
What You Need to Know About IRS Requirements
19 Jan 2011
Sure you can! If you are one of those fortunate people who need a tax write-off, a donation to a qualified non-profit organization is one way to get one! If you have household items in good used condition, jewelry, vehicles, or other personal property to donate, follow these basic steps:
1. For items valued at less than $500 report on Schedule A Itemized Deductions. Taxpayer’s records must include a written acknowledgement of receipt of the contribution.
2. For items valued at $500-$5000 report on IRS Form 8283 Noncash Charitable Contributions Section A. Taxpayer’s records must include a written acknowledgement of receipt of the contribution.
3. For items valued at more than $5000, report on IRS Form 8283 Noncash Charitable Contributions. A qualified appraisal by a qualified appraiser is required. The appraiser must complete, sign and date IRS form 8283, Section B Part III.
Please realize that “value” is not an arbitrary concept...the IRS defines “Fair Market Value” as “The price at which the property would change hands between a willing buyer and willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts.”
This essentially means – be realistic about the prices you assign your items for donation. If you are uncertain, go to a thrift store or check Ebay for items that are similar which have sold (asking prices are meaningless). To be certain, contact a qualified appraiser!
Kathy Sowden MS, GCA, ISA