March 21, 2013

MinistryCPA Special Topic: Donating a Vehicle

Non-cash donations may be just as useful to ministries as cash contributions. Some contributions must be treated with special care however. Take donating a vehicle for example....

The IRS does have some special rules for donating cars. Instructions for Form 8283 Noncash Charitable Contributions say the following about donating cars:

"If you donate a qualified vehicle with a claimed value of more than $500, you cannot claim a deduction unless you attach to your return a copy of the contemporaneous written acknowledgment you received from the donee organization. The donee organization may use Copy B of Form 1098-C as the acknowledgment. An acknowledgment is considered contemporaneous if the donee organization furnishes it to you no later than 30 days after the:
  • Date of the sale, if the vehicle was sold [by the donee organization] in an arm's length transaction to an unrelated party, or
  • Date of the contribution, if the vehicle will not be sold by the donee organization before completion of a material improvement or significant intervening use, or the vehicle will be given or sold to a needy individual for a price significantly below FMV in direct furtherance of the organization's charitable purpose of relieving the poor and distressed or underprivileged who are in need of a means of transportation."
To read the entire section on vehicle donation, click on the Form 8283 link provided above and read the section "Qualified Vehicle Donations."

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