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 hardworkings 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 repair the vehicle 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. Tax information is also available at www.irs.gov. To learn more about assessing the potential fair market value of a donated vehicle, visit www.kbb.com, www.NADA.com, or www.edmunds.com. For additional information on how a car donation will affect your tax liability, please consult with a tax professional to accurately determine your potential tax deduction.

For additional information to assist you in the donation process, read IRS Publication 4303 “A Donor’s Guide to Vehicle Donations” or learn more 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.

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