Car Donations and Tax Deductions
Many people donate their used vehicle to a nonprofit because of the tax deduction.
A few years ago, anyone who donated their vehicle to a charity such as Vehicles for Change could deduct the fair market value of the car from their taxes.
But on January 1, 2005, the tax law changed: now, when a taxpayer donates a car to a nonprofit, the amount they can deduct from their taxes depends on how the charity uses the vehicle.
Most nonprofits send donated cars directly to auction. Vehicles for Change stands out because - while a portion of our vehicles are sent to auction due to their age or mileage - we also resell donated cars on our retail lot or award cars to low-income families. That's why so many car donors chose Vehicles for Change - we are one of the few nonprofits in the country that can offer the fair market value tax deduction to our donors!
If Your Vehicle is Awarded to a Family
Your tax deduction would be the fair market value of the vehicle and you should receive a tax letter within 30 days of the vehicle arriving at VFC's lot.
If Your Vehicle is Sold at Auction
Your tax deduction would be the selling price of the vehicle and you should receive a tax letter within 30 days of the vehicle's sale date.
If Your Vehicle is Sold on VFC's Retail Lot
If the vehicle requires major repairs, your tax deduction would be the fair market value of the vehicle minus the estimated cost of repair. Vehicles for Change will send you both of these values in your tax letter. You would receive this tax letter with 30 days of VFC determining that the vehicle needs major repairs.
If the vehicle doesn't require major repairs, your tax deduction would be the selling price of the vehicle. You should receive a tax letter within 30 days of the vehicle's sale date.
Want to maximize your tax deduction? Complete our online donation form today!