Your vehicle donation to an Opportunity Cars program could open the door to economic opportunity to struggling families by helping them seek or keep a job, access safe and affordable housing, medical care, educational opportunities and a host of other important services. With your contribution, you help yourself, local communities, and low-income families.

You may have heard that tax deductions for cars donated to charities are no longer allowed. Not true! The new tax law allows donors to STILL DEDUCT THE FAIR MARKET VALUE under certain circumstances.  

In 2005 the IRS issued new guidelines related to vehicles donated for charitable purposes. The guidelines clarified how to define the fair market value of the car when used in itemizing the amount of a charitable donation. In general, the new guidelines provide that the gross sale price of the car, such as the price received when selling it for salvage, will be the amount of the deduction, unless the charity has a significant intervening use of the vehicle or materially improves it before sale. On the other hand, donors to “charities that intentionally sell or transfer donated vehicles at a low or no cost to low-income recipients” may take the fair market value of the car as a deduction. This means that a person wishing to donate their car may be able to claim a much higher deduction when they donate their car to a program that will fix the car and sell it to a low-income customer at a subsidized price (or give it away), rather than to a program that simply sells all cars for salvage.

If your car can be repaired and provided to a family you may be able to deduct the fair market value as a charitable contribution provided you file an itemized federal income tax return. If you have specific questions about how a car donation will affect your tax liability, you should consult an accountant or other tax professional. Tax information is also available at www.irs.gov. To learn more about how to assess the potential fair market value of the car you want to donate, visit car industry websites at www.kbb.com, www.NADA.com, www.edmunds.com, or review IRS guidelines. Please consult with your tax advisor to accurately determine your potential tax deduction.

For more information to help you in the donation process, see IRS Publication 4303 “A Donor’s Guide to Vehicle Donations”. For further information about how to donate your car directly to an Opportunity Cars program today, use our program locator to find and contact a program in your area.

Donate Now