An effort to spread the awareness and provide information about charitable car donation and how you can make a difference to the lifes of the unprivileged and needy people.

Following the rules setup by the IRS for vehicle donation can help your get a good tax rebate.

IRS Regulations concerning tax reduction of Car Donations

If you donate a car to a qualified organization after December 31, 2004, your deduction is limited to the gross proceeds from its sale by the organization. This rule applies if the claimed value of the donated vehicle is more than $500. However, if the organization makes significant intervening use of or materially improves the car, it is possible that you can deduct its fair market value.

These rules also apply to donations of recreational vehicles, boats, aircraft, and any vehicle manufactured mainly for use on public roads, and highways.

IRS requires an Acknowledgement

It states that " You must get a contemporaneous written acknowledgement from the charity and attach it
to your income tax return, Form 1040. If you do not have an acknowledgement, you
cannot deduct your contribution. If the claimed value of the car is more than $500, the
acknowledgement must include:

• your name and taxpayer identification number,
• the vehicle identification number, and

a statement certifying that the car was sold in an arm’s length transaction
between unrelated parties, the gross proceeds received from the sale, and a
statement that your deduction may not be more than the gross proceeds from
the sale, or

if the charity intends a significant intervening use, a statement certifying the
intended use, the duration of that use, and that the charity will not sell the car
before completion of that use, or

if the charity intends to make a material improvement to the car, a statement
certifying the intended material improvement and that the charity will not sell
the car before completion of the improvement.

You must obtain the acknowledgment no later than 30 days after the date the charity sells
the car, or 30 days from the date of the contribution if the charity intends to make
significant intervening use of or materially improve the car. "

Please note these rules do not apply to donations of retail inventory.

Remember If you donate a car to charity, you can never be sure of the amount of the deduction until the charity actually sells the vehicle and reports the sale price to you. Since charities mostly auction the vehical, the selling price could be much lower than the fair market value. Sometimes you may not get the value you expect.

To read more about the Tax Regulation checkout the IRS Publication 4303.