Donating a car, truck, SUV or van you no longer need is a simple way to support a cause you care about, and it may lower your taxes. But vehicle donation rules have a few details worth understanding before you hand over the keys. Here’s a plain-language overview based on IRS guidance.
This article is general information, not tax advice. Please consult a tax professional about your own situation. The IRS explains the rules in detail in Publication 4303, A Donor’s Guide to Vehicle Donation.
First: you need to itemize
Charitable deductions only help if you itemize deductions on your federal tax return instead of taking the standard deduction. You should also make sure the organization is a qualified 501(c)(3) charity. Wings of Grace is (EIN 39-3749850).
The $500 rule
- If the charity sells your vehicle for more than $500, your deduction is generally limited to the gross amount the vehicle sold for. The charity must send you Form 1098-C, generally within 30 days of the sale, showing the sale price.
- If the vehicle sells for $500 or less, you can generally deduct the lesser of $500 or the vehicle’s fair market value on the date you donated it.
- There are exceptions. If the charity makes significant use of the vehicle in its programs, materially improves it, or gives or sells it at a steep discount to a person in need, you may be able to deduct its fair market value. The 1098-C will say so.
The paperwork
- Keep the written acknowledgment and any Form 1098-C you receive with your tax records.
- If your deduction is more than $500, you’ll generally attach Form 8283 (and Copy B of Form 1098-C) to your return.
- Use a reputable guide, such as a used car pricing guide, to estimate fair market value when needed, and keep a copy.
Transferring the vehicle in Ohio
- Have your Ohio title ready. You’ll sign it over to complete the transfer. If you’ve lost it, your county Clerk of Courts title office can issue a duplicate.
- Remove your license plates and personal belongings before pickup.
- After the transfer, contact your insurance company to cancel coverage on the vehicle.
Make your vehicle count
When you donate a vehicle to Wings of Grace, the proceeds help families recovering from disasters and financial emergencies across Greater Cleveland. We accept most vehicles, running or not. Start your vehicle donation here.